Use this calculator to find out how much house you can afford in Lake Tahoe. Enter your income, down payment, and debts to see the mortgage amount that fits your budget.
This is the combined annual income for you and your co-borrower. Include all income before taxes, including base salary, commissions, bonuses, overtime, tips, rental income, investment income, alimony, child support, etc.
Include all of you and your co-borrower’s monthly debts, including: minimum monthly required credit card payments, car payments, student loans, alimony/child support payments, any house payments (rent or mortgage) other than the new mortgage you are seeking, rental property maintenance, and other personal loans with periodic payments.
Do NOT include: credit card balances you pay off in full each month, existing house payments (rent or mortgage) that will become obsolete as a result of the new mortgage you are seeking, or the new mortgage you are seeking.
This is the amount of money you will put towards a down payment on the house. Make sure you still have cash left over after the down payment to cover unexpected repairs or financial emergencies.
This is the interest rate for the loan you will receive. It is pre-filled with a 4% interest rate, which is an average rate at the moment. This rate varies.
Buying a new home should be exciting but it should also provide you with a sense of stability and financial security. Living month to month, with barely enough income to meet all of your obligations, the threat of foreclosure looming if you slip up—well that’s the wrong kind of excitement. That’s why it’s so important that you know ahead of time the answer to that very important question, How much house can I afford?
Most kinds of affordability calculators focus on a single debt-to-income (DTI) ratio. They take the user’s gross monthly income (before taxes) and multiply it by a pre-selected DTI, usually something like 36 percent. From that result, they subtract any other payments like auto loans, credit cards, and student loans, and what remains is the maximum house payment — principal, interest, taxes, and insurance.
However, most personal finance experts believe that even buyers with identical income and debts shouldn’t necessarily spend the same amount on a home. There’s nothing in most affordability calculators, for example, that accounts for payment shock. Payment shock is the amount of a new housing expense divided by the old housing expense. Most underwriters don’t want to see a payment shock that exceeds 150 – 200 percent. If a would-be buyer currently rents for $500 a month, it won’t necessarily be easy for him or her to get approved for a mortgage with a $2,000 a month payment. Instead, they might be better off with a more conservative scenario.
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