Real Estate Tips from Bob Rich-Figuring Monthly Payment

ou have enough funds for the down payment and you qualify for the mortgage. Now --- can you afford the monthly payments?

To figure out how much you can carry, convert all amounts into monthly figures. If you are paid twice a month, add two paychecks. Incorporate infrequent expenses (vacations, gifts, clothes) by adding them up and dividing by 12. Your total monthly income may include salary interest, dividends, and bonuses. Typical monthly expenses are food, utilities, education, transportation, taxes, insurance payments, etc. Your total monthly income minus monthly expenses will give you the amount available for monthly housing costs.

This total must cover all of your housing expenses, including mortgage payments (principal+interest+taxes+insurance), maintenance and repairs. The higher the down payment and the longer repayment time, the lower the monthly payment will be.