How Much Can I Afford?
To calculate ‘how much house can I afford,’ a good rule of thumb is using the 28%/36% rule, which states that you shouldn’t spend more than 28% of your gross monthly income on home-related costs and 36% on total debts, including your mortgage, credit cards and other loans like auto and student loans.
How Do I Calculate My Mortgage Payment?
If you want to do the monthly mortgage payment calculation by hand, you’ll need the monthly interest rate - just divide the annual interest rate by 12 (the number of months in a year). For example, if the annual interest rate is 4%, the monthly interest rate would be 0.33% (0.04/12 = 0.0033).
What is a Mortgage?
A mortgage is an agreement between you and a lender that gives the lender the right to take your property if you fail to repay the money you’ve borrowed plus interest. Mortgage loans are used to buy a home or to borrow money against the value of a home you already own.
What is a Reverse Mortgage?
A reverse mortgage works by using a portion of your home equity to first pay off your existing mortgage on the home - that is, if you still have a mortgage balance. … After paying off your existing mortgage, your reverse mortgage lender will pay you any remaining proceeds from your new loan.