How Much Can I Afford?
Knowing how much you can afford to pay is a crucial step in your search. Nailing down your budget early will make the overall process more focused and less stressful.
Here’s a good way to figure out how much you can afford:
The 28/36 Rule
The 28/36 rule is an established benchmark used by many lenders to determine how much credit to offer you. Here's how it works:
Get preapproved for a mortgage. Your lender can approve you for a certain to loan amount prior to your home search. This gives you a solid number against which you can assess the affordability of the houses you visit.
The "28" refers to the notion that no more than 28 percent of your gross monthly household income should go toward housing costs, which include mortgage principal, interest, taxes and insurance.
To calculate, simply multiply your gross monthly income (amount before taxes) by .28. Use this amount as a guide for how much house you can afford.
Example: You earn an annual salary of $70,000. Divide 70,000 by 12, giving you a monthly gross income of $5,833. Multiply that by .28, and you'll find you should spend no more than $1,633 each month on total housing costs.
The "36" part of the 28/36 rule refers to your overall debt, which shouldn't exceed 36 percent of your income. This is important to consider because other high monthly debt loads – such as car and credit card payments – impact the amount you can afford to spend on housing.
For first-time home buyers, the tricky part is knowing how much to budget for taxes and insurance. I can assist you with this.
Get In Touch
share
Local Expert Updates
Aaron Jones
Cell: 712.320.9442Community Updates
The West Lake "Tie Up"
For most leisure boaters in the Iowa Great Lakes, there are 2 main hot spots to go throw an anchor, sit back, and just relax. Sometimes this will result in numerous boats tying up to one another (you may not even know your neighbor), and sometimes it results in a little more privacy where you can chill just by yourself. Every weekend, boaters make the trek across the deepest parts of West Lake to either Gull Point (North AND South side) and Miller's Bay. Thought there are many other great areas to throw an anchor, relax, and swim, these are the two hot spots. If you aren't sure where to go on a Saturday afternoon or wonder where your friends might be, these two spots would be a good start.
Haywards Bay
Haywards Bay on West Lake Okoboji boasts low approaches and one of the few areas on West Lake to offer sand beaches. Renowned for the "bay of the flags", you will know you are in Haywards bay because of the all the American flags on the end of the docks. Fishing is great in Haywards Bay and the sunsets are one in a million. To get to Haywards Bay by car, one would drive the east side of the lake on Lakeshore Dr.
Buyer and seller real estate app, right at your fingertips.
Browse real-time MLS listings in the Iowa Great Lakes Region
Filter for specific areas and amenities
Be notified when there is a new MLS listing match, status change, or price drop
Stay in touch with your agent
Save searches and favorites
Agents, Buyers, Lenders and Appraisers can view your transactions
View, download and sign documents
Every 30 seconds, a RE/MAX agent helps someone find their perfect place. Let us help you find yours.
1. Search "SellBoji" in your app store on your cell phone.
2. Download the app
3. Create a profile to access info or save searches (This is not necessary to browse the listings)
4. Enjoy all the benefits of the real estate app
