How Much House Can I Afford with a Mortgage?

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6 Responses

  1. I always get equity and escrow mixed up so thanks for clarifying that. I am sure that I will ask you again in the future what those things mean. And I agree with you, there is something awesome about owning your own piece of land. Hopefully, it will officially be ours on paper very soon.
    Love you,
    Kare

  2. Man, I wish I would have read this before my wife and I purchased our first home 10 years ago. I was told, “buy the most you can afford, It’s an investment!” we are still recovering from this mistake. Great article with tons of good information!

  3. BusyMom says:

    We have an ARM with fixed low rate for five years. We have sightly over two years left in those five. We have been aggressively been paying off the mortgage, but have begun to worry about what will happen when the period is up. May be a refinance? We can’t touch it now because the interest rates are much higher right now.

    • Chris says:

      Thanks for commenting.
      It sounds like you’ll be ok for now. But knowing you’ll have to refinance because the rates will surely adjust up once the first five years are up. Can you afford the new payment with a higher rate? Since you’re paying extra already, you probably can.
      But I would worry too, and recommend that you get to a 15 year fixed as soon as possible after the rate adjusts at or past the fixed rate level. You’ve already paid 5 years at that point. Why stretch it out another 30 years? 😀

      • BusyMom says:

        We can afford the higher rate, just is a waste of money. Our plan is to pay it off in three more years after that. When we refinance, we will probably just look at the lowest rate of interest, nothing else.

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