What Should I Spend?

This page is devoted to the second and most important question when determining your price range. “What should I spend?" While a lender will determine what you CAN spend that in no way means that their number is what you SHOULD spend.

We cannot tell you what to spend. All we can do is to give you some tools and advice to make that determination on your own. As mentioned on the “What can you spend" page mortgage companies use your gross income. That means that they do not take income taxes into account. We attempted to do that in our “Loan Calculator". We assumed that 33% of your income would go to income taxes.

Again, we had to make general assumptions because everyone’s situation is different. The purpose of the monthly income number and the money left number is to remind you that income isn’t taken into consideration by lenders and to give you a rough estimation of how much money is left over after monthly payments and taxes.

Remember that home ownership has numerous costs with it. These include upkeep costs and utilities. Also, each person needs to take into account monies spent on hobbies, entertainment, etc.

So when you are deciding what to spend on a home, remember property taxes, income taxes, insurance, and any other expenditures. Many times lenders will pre-approve you for more than you can actually afford. It is up to you to determine what you are comfortable spending monthly and use our “Mortgage Calculator" to figure out what home price fits your budget.