Accuracy of online mortgage calculators? (insurance, property tax, income, approval)

[will4444]

Hi, I was wondering if anybody can attest to the accuracy of the online mortgage calculators? Also, I was wondering if their accuracy depends somewhat on what state you live in? For example, I live in Texas with no state income tax but higher property taxes.

For example, my income is $200K a year, with $1100 in car payments, $1400 in student loans, and no other bills. The calculator says that we could afford a house around $500,000 a year. Does that seem about right?

Thanks for the help.

[NYSinger]

Banks will always approve you for more than you should spend. I suggest to look at your monthly income and pay the difference between rent and additional expenses that a house provides, such as insurance, property taxes, maintenance and higher utility bills for about 6 months and see if you are tight or not. Those additional costs could be around 40% of the mortgage. Also include the difference between rent and the mortgage you think you'd be comfortable at.

The rule of thumb is not to go higher than 2.5 times your income. I suggest around 2 times though just to be conservative.

[chet everett]

Approval standards include a DEBT to INCOME rate from 30% to 38%.

There is nothing wrong about "underbuying" by itself, but I have noted a tendency of some underbuyers to then turn around and "over improve" their homes and/or lifestyle. Putting money into fancy gadgets, decorating or vacations are all within one's right to choose, but it certainly does not improve one's financial position...

Rarely do lenders consider expenses, unless a locale is inordinately expensive, and that is when they tend to go to the high end of the debt::income ratio...