How do you know when you can afford to buy a house?

December 15, 2020

After my last blog about rent calculations, using Zumper.com, I received a bit of email from people asking about mortgage calculators and buying a home. This led me on a quest, because I really have not looked into it, being that the median cost of a home in Los Angeles starts in the millions and I am currently not in the market. A lot of people, due to this pandemic year, have left California and relocated to other states that garner more bang for their buck. The size of a home in Texas is a fourth the price of what it would be in California, but with much larger land and square footage! There are so many questions that potential homebuyers needs to ask themselves that deal with stability, credit score and commitment.

I found similar rental calculator information for mortgages on the regular sites like zillow.com, Bloomberg.com, MoneyUnder30.com, w sj.com that all discuss this, but there is always a leap off point or an advertisement attached to it to get you to “buy in” to some other service.

I was searching for clear cut info on mortgages to bring to you all and the “when and how” to start planning for a new home. I came across Mortgage Calculators.info which is set up like a library of information and a research tool. On the site, in a very clear cut way, they make you look at a set of questions that you should genuinely ask yourself before setting out to take on a huge mortgage loan.

Have you saved enough for a down payment?
Can you afford the mortgage payments?
Do you have a good credit score?
Have you been employed for a long time / Do you have a stable income source?
Are you staying in your area for good?
Can you afford maintenance and home improvement costs?
Do you have a lot of debt?
Are you keen on owning your own property?
Do you know what type of house you want to buy?

Mortgage payments are no joke. As a potential homebuyer, it is imperative to take a serious look at the answers you have to those above questions because you have to take on the commitment to follow through with your mortgage payments. If you find yourself not being able to answer those questions in a way that makes sense to buy a home and the cons outweigh the pros, then Mortgage Calculators.info suggests that you give yourself more time and feel no shame about that.

There are several calculators on the site; Basic Calculators, Advanced Calculators, Money Saving Calculators, Home Loan Options, Real Estate Investors & Property Sellers, and my favorite, Current Los Angeles 30-YR Fixed Mortgage Rates (they have the appropriate calculator for your area, once you put in your zipcode).

Current Los Angeles mortgage rates are displayed at the bottom of the web page. By default, 30-year fixed-rate mortgages are displayed, according to your location. The table on the site has interactive features which allow potential homebuyers to compare and contrast different loan terms, down payment amounts, fixed vs adjustable rates, purchase vs refinance loans, property use type, military status, home type, discount points and so many other features!

Use current market data to run accurate calculations and find a local lender to work with.

Another cool calculator feature is:

Loan Amortization

Amortization – See how quickly you’ll make progress paying off your home using regular payments. Print out the amortization schedule to see your current balance at any point in time.

It’s a one stop shop for all your mortgage questions and also teaches you what to do to start planning, if you are not at a position where you are ready to buy a home. I learned a lot and am still flipping through the entire website.

If you want to start inputting your numbers to see how much house you can afford, you can start here.