This is a fun tool to see how much home you can afford. This particular one accounts for your credit history and what other loan obligations you have. Do you agree with their calculations?

Home Affordability Calculator - MSN Money

__________________
Read my recent blog: My Frugal Mistake
Check out the Mommysavers Group on Facebook

Let's see a Mommysavers Member featured on Oprah! Click here for more information

We are about to begin building a house (waiting for a building permit). I put in what we have towards building costs, and our outstanding debt and the number is within a few thousand of what we were going to loan. (However, our house will be worth substantially more when we build it ourselves than the "purchase price" put into the calculator.)

No, honestly I don't agree with it. It doesn't take into consideration all your other bills, and depending on the area those can be huge! It says we can afford something I WOULD NEVER pay for a home mortgage (34% of gross income!!--I currently pay 12%). It seems like that number would put us in a huge bind, and one I wouldn't ever want to be in, just to be in a home. I guess I don't like the fact that it gives a number I could afford already and then adds in the down payment...i would rather it take away the down payment instead of adding it, does that make sense? I don't have a down payment in order to afford a more expensive house, I have it to severely cut my note. I'm not sure I like calculators like this, I think they are the reason people jump into more house than they can handle, money wise, instead of being sensible.

It says DH and I can afford TWICE what we currently pay for housing (we are renters due to an absolutely insane housing bubble where I live). No way is that true! We currently pay just under $900 for rent. It's saying we could afford a housing payment of $1900. Crazy. While I'll admit that we can save money and do things with our excess cash with what we pay for rent right now, who wants to pay over twice that and lose out on being able to save money or have vacations, etc.? What kind of life would that be?

It was DEAD ON for me our morgage 136K it said 142K so really not bad.

YES 35% of our gross income is a lot to spend. But it also can be pulled off we have been pulling it off for 18 months now.

I am also in a Moderately High COL area. Average home price is 400K. Currently there is nothing on the market for 180K so We will just have to be happy that we got in when the market was lower

__________________
Kimberly Proud Mommy to Bethany Rose April 2006

It was right on for us too. We did take out an equity loan to make improvements to the house, but my husband actually pulls in a little more than I typed in with a second job, so that would cover it. It is tight, but possible.

No way! it was 4X higher than the cost of our house!

I think that Cost of living does have a big part in what you buy. Im in the seattle area you are paying for location. Believe me if we could have found a home for even 10K less we would have. Even though it is tight we have a lot of equity for just 3 years.

__________________
Kimberly Proud Mommy to Bethany Rose April 2006

Wow...it says that we could afford a house that is a little over three times more expensive than the one we're in now! Very interesting calculator. My friends and I have had conversations before about moving to larger houses and such...the thing that I always come back to is the lesson that I learned from reading "The Millionaire Next Door." For those who haven't read it, one of the themes of the book is that the lifestyle that you choose often impacts how far ahead you are able to get financially. For instance, if you purchase as much home as you can afford, that may lead you to living in a neighborhood where other "pricey" decisions are made. You may find yourself needing (wanting!) to maintain a lifestyle similar to your neighbors - think landscaping, country club memberships and expensive cars - just to protect appearances.

We've decided to live a much simpler life - much less pressure - and the opportunity to be debt-free!

__________________