Mortgage calculator shows what you can buy

Bankrate's mortgage calculator can show you exactly how much house you can afford.

While your wages and any other monthly income are crucial for calculations, those aren't the only items you need to take into account. As the mortgage calculator shows, things such as your car payment, credit card debt and other monthly expenses are factored into the equation. You also need to determine how much money you can afford to put down on your home, and the interest rate you'll pay.

Bankrate can help you find the mortgage rates available in your area when you enter your city or ZIP code, the loan amount you have in mind and the amount you intend to put down.

With that information, the best rates in your area for someone with a credit score of 700 or above will be displayed.

The mortgage calculator also ensures you take real estate taxes and insurance into account when figuring out how much house you can afford. Not only will that keep you out of financial trouble, but it will also reassure lenders about your ability to repay the loan.

Lenders want to see your debt-to-income ratio, so there are two other calculations to keep in mind.

First is the front-end ratio, which shows how much of your gross monthly income would go to your mortgage payment -- including principal, interest, homeowners insurance and real estate taxes. The amount shouldn't surpass 28 percent of your gross monthly income.

Lenders also look at the back-end ratio, which shows how much of your gross monthly income would go toward all of your debts. That calculation takes things such as student loans, car payments and credit card debts into account, and shouldn't exceed 36 percent of your gross income.

Using Bankrate's mortgage calculator will help you judge how much you can afford before you step foot inside your prospective new home.

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