Even woodchucks know its a good time to find a new home in Andover!  But unlike these critters, if your thinking about buying a home, you need know how much of a mortgage you can afford.  It's important to do this even before you begin to look at houses for sale. Otherwise you may be wasting your valuable time and you may be disappointed to learn you cannot afford the home you'd like to buy.  The first step in determining what type of home you can afford is to figure out what lenders call your "debt-to-income ratio." Most lenders use 36% and under, but you might be more comfortable with a lower number such as 28% of your gross monthly income for housing expense. The following are the steps will help you calculate how much home you can afford.

1. Figure out all of your debt. Multiply your gross monthly income by .36 to find your total allowable monthly debt.
2. Add up all of your fixed monthly expenses.
3. Subtract your fixed monthly expenses from your total allowable monthly debt.

This number is the amount that you have for your mortgage payment, your home owner’s insurance and your property taxes.  For more help figuring out your total allowable monthly debt see a home affordability calculator.

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