One of the most common mistakes of borrowers or insurance subscribers is their less information of what they can afford to pay. Due to such mistake of calculation, many borrowers end up with foreclosure on their property or perhaps indebted to the banks or mortgage companies. Before deciding to get a mortgage loan or insurance, it is indeed essential to calculate what you can afford to pay based on your present assets. In addition, if you are figuring out how much would be your mortgage amount, take consideration also that there are other costs and terms involved.

It is frequently advised by mortgage experts to keep 1/3 mortgage payment from your monthly income. However, when purchasing a house, it is important that you take into consideration extra costs such as:

1. Maintenance
2. Utilities
3. Property taxes
4. Homeowner’s insurance
5. PMI, in case a 20% down payment was not made
6. Repairs

Taking the experts’ advice can be a good thing, but it would be best to have a calculation with your own and considering in the list those extra costs involved. With that, you will be safer to separate more than an exact calculation; hence, it will not lead you with a tight budget having to stretch your monthly income. Moreover, it is true that you may not get a higher mortgage, yet at least you are more secured and assured that you can afford to pay it without leading you with a headache eventually.

It is very basic that lending companies do not give you a fast approval without checking your assets, employment income, liabilities or debts, foreclosures, past bankruptcies, and/or credit history. Lending companies take a check on those before they agree negotiating with you. So better yet, get acquainted with those requirements.

How to calculate the mortgage amount would be like this:

First is to calculate your PITI payment – monthly maximum principal and interest, plus taxes and insurance. And then, from that PITI, deduct insurance and taxes. In order to get the total payments you can make up to 30 years, you can multiply by 12 and then 30 from that PITI after deductions. Further, you can ask help for the calculation and formula in case you will need one. That is free of charge as every consumer has the right to do so.

Calculating beforehand of your mortgage amount can save you from saying sorry after.