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Thinking about a mortgage? How much can you realistically afford?

By: 2 August 2011 No Comment

Taking out a mortgage can, in many ways, be a daunting process.

Consumers might wonder, for example, how much they can realistically afford to borrow. How might their payments be influenced by property taxes and mortgage insurance? How much do current interest rates influence mortgage payments? If a potential home buyer brings home, say, $5,000 a month after taxes and spends some of that money on a car payment and utilities, how much of a mortgage can that individual realistically take out in today’s market where both lenders and consumers are more conservative in their respective approaches?

Anyone looking to take out a mortgage is faced with a lot of questions. While most of those can be answered in short order by a mortgage banker who combs through a number of factors in determining whether someone qualifies for a home loan, we live in an age where people tend to want to quickly get a rough idea of whether they are in a realistic position to buy homes. In other words, people might see a house that costs, say, $150,000 and want to know if they have a shot of qualifying for a mortgage before heading to a bank to start the process of taking out a loan.

The national Mortgage Bankers Association has developed an application for Apple iPhones and mobile devices using Google’s Android operating system that can a individual consumer a rough idea of how much they can realistic borrow when thinking about purchasing a home. The free application is available through Apple’s iTunes Store, the Android Marketplace and and can be found through those services by running a search on any of them for “MBA’s Home Loan Toolkit.”

What is the Home Loan Toolkit? It’s a mortgage calculator which will quickly let an individual know how much he or she can borrow to purchase a home by keying in a couple of pieces of information – take home income and the amount of debt payments made every month. It also keeps up with current mortgage rates and features a glossary defining terms specific to home loans – a handy thing to have when dealing with the complexity of the lending industry.

Bear in mind that the toolkit will give a potential homebuyer a rough idea of whether he or she will qualify for a mortgage that covers the cost of a home. It will tell you, for example, that perhaps you might be able to take out that $150,000 mortgage, but won’t get more specific than that. It will also give the consumer a rough idea as to whether he or she has too much debt and not enough income to handle a mortgage and that is, indeed, handy information to know, too.

The toolkit is great for giving people a rough idea about whether they can realistically take out mortgages, but the real fine tuning in that process is done by mortgage bankers who have made careers out of helping people figure out if they can afford mortgages. In other words, the toolkit can tell you whether taking out a mortgage is feasible, but a mortgage banker can tell you whether taking one out is possible and advisable.

Still, it’s a handy tool for those who want to purchase homes and wonder if they can afford them. It’s another free service that, hopefully, will help people who want to purchase homes and are looking for an easy way to find out whether they qualify for mortgages.
Home Sweet Home is written by Ethan C. Nobles and is sent weekly to publications throughout the Natural State on behalf of the Mortgage Bankers Association of Arkansas.

About: Ethan C. Nobles:
Benton resident. Rogue journalist. Recovering attorney. Email =

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