Another first-time buyer question (Am I over-extending myself?)

Based on the fact that you are questioning yourself should be a good indicator about your ability to afford this home payment. In regards to the debt-to-income housing ratio for qualifying purposes, you are at 45% and that would signify that you might be overextending yourself to a house payment. Work with your local mortgage professional to discuss in more details your comfort level of moving forward regardless if you qualify. Have a great Friday.

Hey Percy... you have analyzed this much more than most borrowers.. the fact that your concious of this is a very postitive thing. If this is the house you want, then your ratios (supported by industry standards), allthough a little high, they are all within the acceptiable range. Also, just a side note here, but you will actually have more than $600 per month left over... by owning a home, you get writeoffs you didnt have before.. Mortgage intrest and depreciation can enable you to file the long form 1040, and should lower your overall taxes... WilliamAcres.com

I always advise my clients that their housing payment(s) should never be more than 33% of their Gross income, and their total debt should never exceed 40% of their Gross. Housing payments would be the mortgage payment, PITI, plus any PMI, 1/12th of your annual homeowner's insurance and property taxes and any monthly HOA dues. As a homeowner, your expenses are going to increase. You are now paying for water, garbage and sewer, where likely it was included before. Your home will be larger, meaning more energy to heat/cool. etc. There are exceptions for those that have significant reserves (savings, 401k and IRA). Also, if you are a very frugal/conservative user of credit, meaning you don't have cards with balances and payments, and the discipline to keep it that way, then you can increase the ratio into the high 40s or even low 50s of your Gross is still fairly conservative. Looking at it another way, if you have done all of the calculations, estimated the increases in expenses associated with the home, and still have $600 left over, as long as you don't plan to blow that each and every month, and it looks like you have the discipline not to, you should be fine even with higher ratios. It looks to me like you have thought this out well. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ www.LoansA2z.com