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How much mortgage payment can I afford?

Not only does owning a home give you a haven for yourself and your family, it also makes great financial sense because of the tax benefits — which you can’t take advantage of when paying rent.

The following calculation assumes a 28 percent income tax bracket. If your bracket is higher, your savings will be, too. Based on your current rent, use this calculation to figure out how much mortgage you can afford.

Rent: _________________________

Multiplier: x 1.32

Mortgage payment: _________________________

Because of tax deductions, you can make a mortgage payment — including taxes and insurance — that is approximately one-third larger than your current rent payment and end up with the same amount of income.

Use mortgage calulator to figure your payments and contact a Traverse City mortgage agent to get your official financing pre-approval. A pre- approval will help you and even more so your Traverse City real estate agent to know exactly how much home you can afford but also many loan programs carry stipulations on the condition of the home, can you include closing costs and if so how much, how quickly can you close once you find the right home etc.  All of these will help make your Traverse City real estate search much smoother and stress free and assist you and your agent in the best way to structure an offer to your advantage!

Jon Becker - Century 21 Northland- Traverse City real estate

Posted: Sunday, April 25, 2010 12:54 PM by Jon Becker
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