For 10% down you will need to save between the following amounts.

If you'd like to pay 20% down (which will give you the most attractive terms), you will need to save between the following amounts.

II. Determining the Amount You Can Spend

The total is your "monthly housing cost"

TIP: You should calculate your total housing cost again after you decide where you would like to live and have investigated typical property taxes and homeowners' insurance for that area. Your real estate agent can help you find this information. Multiply your gross monthly income by 28% (0.28).

____________________ x 0.28 = $_________________

This figure is called your "housing expense ratio"

This figure may be referred to as your "total monthly debt."

Multiply your total monthly debt by 36% (0.36).

____________________ x 0.36 = $_________________

This figure is called your "total debt-to-income ratio."

The lender will use these ratios to figure out what it thinks you can afford to pay each month and to calculate what dollar amount it will lend you.

The total dollar amount will depend on the size of your down payment, what kind of mortgage you qualify for, and other factors.

For a very rough idea of the total dollar amount, multiply each ratio by twelve and then by the number of years you will be paying the mortgage. Thirty years is most typical, though some mortgages have a ten-to-fifteen year term.

NOTE: This very rough idea does not include any consideration of the interest you will be paying. Once you have a rough idea, talk to a mortgage lender for a better estimate of how much you'll be able to borrow. Many computers have a program for doing this calculation, as do mortgage companies who have websites. Just type "mortgage" into your browser's search engine and you'll probably have several hits that will do the estimate for you based on the information you provide.