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Old 02-13-2007, 02:56 PM   #10
Scooby Specialist
Member#: 3400
Join Date: Jan 2001
Chapter/Region: South East
Location: Boca Raton, FL
2016 Red Pirate Cat
1981 CJ-7


You should really do a search on this. Not being an ass, but this is well covered material and you will find lots of info.

Get used to the term PITI. Stands for Principal, Interest, Taxes, and Insurance. Most planners estimate that all that combined shouldn't be more than 28-33% of your monthly gross income. If you make a lot of money than you could probably spend a larger percentage of your gross income on PITI, than if you make less. There are lots of online mortgage calculators that you enter the home price, interest rate, tax rate, est. insurance payment and it will calculate monthly PITI for you, and even give you an idea on how much income you need to be able to afford it in general terms.

Let's say you put 20k down and are financing 180,000 of a 200,000 house:

At a 30 year 6.5% mortgage, your monthly PI payment is $1137.72, add your local property taxes and insurance payment and there's your monthly PITI.
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