If you're looking to buy your first home, find out how much you can afford. New homeowners may underestimate affordable amounts, especially with current interest rates remaining low. In addition, your monthly house payment could actually be lower than your monthly rent.

Consider gross income and all monthly expenses to figure out how much you can afford in a new mortgage. For example, suppose you and your spouse together earn $5,000 in gross monthly income. You have no outstanding debts, such as car payments or credit card balances. On a 30-year new mortgage with a 4 percent locked in interest rate, you could afford to pay approximately $1,400 monthly on a $280,000 mortgage.

Suppose a single person with the same income, roughly $2,500 monthly, also has a $300 monthly car payment and pays a $50 monthly credit card payment. This greatly reduces how much the person could afford to pay on a new mortgage, no more than $467 a month, making an affordable home maximum of $102,000.

Since each individual's monthly income and expenses are unique for his or her situation, it is best to consult with a professional to determine how much you can afford. 

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