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Here's A Quick Way To Figure Out How Much House Can You Afford
The stock answer given to this question is, if you rent and have cash for a down payment you can purchase a home. But what if you don't rent? Then here's the simplified version of what a mortgage broker would do with you.
Step One:  Annual Salary  
What is your gross monthly income from all sources? If your annual salary is $75,000, divide this by 12 and you'll see that your monthly income is $6,250.
Step Two: Monthly salary x percent you want to spend. 
Broker and financial planners ill recommend that you spend anywhere between 25% and 6% of your monthly income on household expenses. We're going to use 36%.  $6,260 x 36= $2,250.
Step Three: Calculate your debt. 
Add up your current monthly debt. This Includes things like a car, loan, insurance, school loans, credit cards, and any other personal debt your may have. All of this added together gives you your total debt. Just a guess, but let's say that these add up to $750 a month.
Step Four: Amount you want to spend- Total debt. 
Now, take that total debt and subtract it from the amount that you were willing to spend per month to get your maximum monthly payment: $2,250-$750= $1,500.
Step Five: Monthly ... more

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