First home mortgage

[PrincessFiona]

Annie,

If memory serves, it depends on whether or not your loans are still in deferment ... if they are, you are in better shape in terms of getting approved for a higher loan. Credit score is important too.

Generally speaking though, banks tend to be much more forgiving of little negatives in your credit report, etc and you'll likely be approved for more money than you could really comfortably afford to pay back.

kris

[DCJenn]

I know the old rule of thumb was was more than 1/3 your income should go to housing costs.

Of course where you live can completely mess that up, as we are paying about 50% of our current income to our mortgage. Also, factor in tax increases (again, here- a Big Fat Bite in the Ass because as your home's value increases, so does the property tax.) Do you want to stay put for a while- think fixed rate, are you jumping ship within five years (you can consider various interpretations of the ARM.

Talk, talk, talk- to realtors, lenders, do research- check the real estate section in the newspaper- trends are covered there. Also, figure in home repair and start up costs- appliances (our dryer died on the 2nd load ever in the new house), make sure you ask the current owners about utility costs.

and trust no one involved in the deal- remember they are all out to make money at your expense. Think used car salesman, only better dressed.

Jenn

I think Jenn meant no more than 1/3. That sounds like a good rule of thumb. Maybe 1/4 if you have substantial debt payments?

[Phoebe]

Our mortgage is about 21% of DH's first year monthly salary after taxes. Right now we are paying $1800/month in student loans for both of us so that is like a second mortgage. The loans were deferred at the time of our home purchase. We put 10% down as a down payment.
We also had to buy a car when we got here. Three of DH's collegues live in our neighborhood so it was a decent price range for all of us starting out after training.

Jennifer

Another thought as you look in different locations -- check out the property taxes. We are currently paying about 3x what we did with our last house which impacted how much we could pay per month/how much we could spend on the house.