How much can you Afford?

So many people often wonder how much they can afford if they purchased a home in Portland, Oregon. There are a lot of questions that need to be answered before you can figure out an accurate monthly payment that will work for you. There are many mortgage calculators out there, this is just an example of a very simple one.
A few things to Consider:

Always use about .5-1% for Points paid on your loan. You should never use a lender who will charge you more than 1 Point. I used to be in the industry and I know how easy it can be for a Lender to trick you into paying him/her more than what you really should. Be careful!

Closing Costs can be between 1-3% not including your down payment (if you have one.)

Annual Taxes & Insurance: Estimate about 1% of the sales price. I never wrap mine into my monthly payments. I pay separately on both of my properties, allowing me to receive discounts when it is time to pay the bill in full in November. If you are responsible enough with setting money aside, I suggest doing it that way and keeping monthly payments lower. Same goes for Home Insurance.

Interest Only. As a first time home buyer, I always suggest looking into this option. I like to save money each month and I know I will refinance or sell in less than 5 years, so why not? The first 5 years are usually always paid to interest anyway.

Interest Rate. Use 6% as the average. Rates last month were at a record low in Portland, Oregon at 5.125% but have gone back up to 6.25% and today dropped back slightly below 6%. What goes up must come down, no worries! The Fed is meeting again in a week or so and rates tend to drop afterwards. 6% is still great!!!

Play around with it and see if you are at the point where you can start considering purchasing instead of Renting. If not, it will give you a jump start in knowing what you will have to do to purchase in the near future. Who knows, you may surprise yourself!

Home Affordability Calculator

How much house can you buy?

Enter your income, the monthly minimum payment on your debts and the amount of cash you can put toward a new home. You'll need to choose an interest rate and estimate your credit rating. We'll calculate the maximum house you can afford, the size of the loan and an estimated payment, making some basic assumptions about taxes, insurance and closing costs. We'll also adjust for your credit history. These are guidelines. Lenders may approve a loan for more, but that doesn't mean the loan is a wise choice