Purpose: Buying a new home is exciting – so exciting, it may be easy to overlook certain expenses to try and “fit” into a mortgage you just can’t afford. This calculator takes all the major financial obligations into account as well as all the cost details associated with the home you’re considering, and then calculates whether or not you can realistically afford that home.
Tips & Insight: Be brutally honest when using this calculator: Sure, it’s tempting to daydream about annual raises, promotions and even new, more lucrative jobs – but beware these traps when using this calculator. Likewise, don’t “fudge” when it comes to how much you owe on credit cards or other loans. If you can, anticipate upcoming costs and include them – for instance, if you think you’re going to need a new car in the near future, include that in your calculations. It’s to your benefit to be as cautious as possible: Even though you really, really like that house, it won’t be “home, sweet home” if you just can’t afford the monthly payments.