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How Expensive of a Home Can I Afford?

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How Expensive of a Home Can I Afford?

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According to the Federal Housing Administration (FHA), your monthly housing costs should not exceed 29 percent of your gross monthly income. This figure is often used by lending institutions to determine how large a mortgage you can carry. If you don’t have debt, that percentage can climb up to 41 percent of your gross monthly income. Using this rule, if your gross income were $20,000 annually, your monthly gross would be approximately $1,666.00 — 29 percent ($483.14) of which you could put toward your mortgage. If you are debt-free, you could afford to pay $341 for every $10,000 of your gross income. Your ability to qualify for a mortgage also depends on your credit, work histories, and on the amount of debt you have. While you may lack in one of these areas, your strength in another may offset it. If your credit isn’t great historically, you may be able to show you’ve shored it up recently by paying off (or lowering) debts and canceling unnecessary credit cards, especially those wit

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