Finance Blog

Stay financially savvy with the Equifax Advisor.

Sign up for our FREE Monthly Email Newsletter


Thank you for signing up for the FREE Equifax monthly newsletter

In addition to keeping in the financial know, you may be interested in checking your credit score and report.

Understand your credit. Help protect your identity.

Equifax Complete™ Premier Plan

  • Know What May Influence Your Credit Score and Be Alerted of Changes
    Credit score monitoring with custom alerts
    Important Disclosure: The Equifax credit score and 3-Bureau credit scores are based on an Equifax credit score model and are not the same scores used by 3rd parties to assess your creditworthiness.¹
  • Help Protect Your Identity
    Automatic fraud alerts encourages lenders to take extra steps to verify your identity²
  • Lock Your Credit
    The ability to lock and unlock your Equifax Credit Report³
Save 75% your first 30 days with the purchase of Equifax Complete™ Premier

$4.95 for the first 30 days, then $19.95 per month thereafter. You may cancel at any time; however, we do not provide partial month refunds.4

¹The credit scores provided under the offers described here use the Equifax Credit Score, which is a proprietary credit model developed by Equifax. The Equifax Credit Score and 3-Bureau scores are each based on the Equifax Credit Score model, but calculated using the information in your Equifax, Experian and TransUnion credit files. The Equifax Credit Score is intended for your own educational use. It is also commercially available to third parties along with numerous other credit scores and models in the marketplace. Please keep in mind third parties are likely to use a different score when evaluating your creditworthiness. Also, third parties will take into consideration items other than your credit score or information found in your credit file, such as your income.

²The Automatic Fraud Alert feature is made available to consumers by Equifax Information Services LLC and fulfilled on its behalf by Equifax Consumer Services LLC.

³Equifax Credit Report Control™ is only available while you have a current subscription to Equifax Complete Premier. Locking your credit file with Equifax Credit Report Control will prevent access to your Equifax credit file by certain third parties, such as credit grantors or other companies and agencies. Credit Report Control will not prevent access to your credit file at any other credit reporting agency, and will not prevent access to your Equifax credit file by companies like Equifax Personal Solutions which provide you with access to your credit report or credit score or monitor your credit file; Federal, state and local government agencies; companies reviewing your application for employment; companies that have a current account or relationship with you, and collection agencies acting on behalf of those whom you owe; for fraud detection and prevention purposes; and companies that wish to make pre-approved offers of credit or insurance to you. To opt out of such pre-approved offers, visit www.optoutprescreen.com/.

4We will require you to provide your payment information when you sign up and we will immediately charge your card $4.95. After that, we will charge the card $19.95 for each month you continue your subscription. You may cancel at any time; however, we do not provide partial month refunds.

Equifax® is a registered trademark and Equifax Complete™ Premier is a trademark of Equifax, Inc. © 2014, Equifax Inc., Atlanta, Georgia. All rights reserved.

How Much Can I Afford to Spend on a Mortgage?

Written by Ilyce Glink on September 25, 2013 in Real Estate  |   No comments

Buying a home is exciting, but it usually comes with a lot of questions—the biggest of which is usually “How much can I afford to spend on a mortgage?” In order to figure it out, you need to understand all of the expenses involved in…

how-much-can-i-afford-to-spend-on-a-mortgageBuying a home is exciting, but it usually comes with a lot of questions—the biggest of which is usually “How much can I afford to spend on a mortgage?” In order to figure it out, you need to understand all of the expenses involved in owning a home.

Scroll down for video

Mortgage companies look at your gross monthly income, or GMI, to figure out how much you can afford. Conventional lenders advise that you spend no more than 28 percent of your GMI on your mortgage, taxes and insurance, and up to 36 percent in total debt.

That means that if you don’t have additional debt—such as school loans, car loans or credit card debt—you can spend up to 36 percent of your GMI on housing.

How big of a mortgage payment can I afford?

Let’s say you make $60,000 a year, or $5,000 per month gross. If you have additional debt, you can spend 28 percent of that $5,000—or $1,400 per month—on your mortgage, taxes and insurance.

If you don’t have additional debt, you’ll be able to spend 36 percent of your GMI, or $1,800 per month.

What about property taxes and insurance?

Figuring out how much you’ll owe in taxes is fairly easy. Depending on where you live, properties are taxed at a rate of 2 to 3 percent per year, or $2,000 to $3,000 on a $100,000 property.

Your insurance costs can vary greatly and are dependent on factors like location, home value and the type of insurance you purchase. The Federal Reserve Board estimates annual homeowners insurance premiums average between $300 and $1,000 (or, roughly $3.50 per $1,000 of the home’s purchase price).

If you need to purchase other types of insurance, such as flood or earthquake, you will probably pay additional premiums.

Keep in mind that if you put less than 20 percent down on your home purchase, you may be required to pay private mortgage insurance (PMI). The Federal Reserve Board estimates that PMI costs between $50 and $100 per month.

You can cancel your PMI once you reach 20 percent equity in your home.

Don’t forget maintenance costs.

If you live anywhere that has a homeowner’s association, your maintenance costs will be evident up front in the form of HOA dues or assessments. Lenders will factor in those costs when they assess how much you can afford to spend each month.

If you own a house instead of a condo or co-op, don’t forget to factor in additional maintenance expenses such as snow removal, tuck-pointing, gutter cleaning and other repairs. Unlike HOA fees, this is not a set cost, so the lender won’t factor in these expenses when qualifying you for a mortgage—but you’re still responsible for them.

Depending on where you live, you can easily spend $5,000 to $8,000 a year maintaining your property. That estimate doesn’t include extra costs, such as replacing appliances when they fail.

Think carefully about how much you can realistically afford, and remember that not all of it can be used to pay your mortgage. If you’ve decided you can spend $2,000 a month on a house, remember that the total amount must cover taxes, insurance and maintenance costs in addition to your mortgage payments.

You’ll also need to save a set amount each month—ideally, $100 to $200—toward unforeseen maintenance expenses that will almost certainly arise at some point down the road.

Ilyce Glink is the author of ten books, including the bestselling 100 Questions Every First-Time Home Buyer Should Ask. Her nationally syndicated column, “Real Estate Matters,” appears in more than 125 newspapers and Websites, and her online “Ask Ilyce” columns are read by hundreds of thousands of people every month. She is a top-rated radio host on WSB Radio in Atlanta, the Home Equity blogger at CBS MoneyWatch.com, host of the Internet program “Expert Real Estate Tips,” managing editor of the Equifax Personal Finance Blog, and publisher of ThinkGlink.com.

The information contained in this blog post is designed to generally educate and inform visitors to the Equifax Finance Blog. The blog posts do not give, and should not be assumed to provide, personalized tax, investment, real estate, legal, retirement, credit, personal financial, or other professional advice. Before making any financial decision, you should always consult with the appropriate professionals who can explain your options, rights, and legal responsibilities, and advise you on any tax, legal, credit, or business implications that may result from those decisions. The views and opinions expressed by the authors of blog posts are their own views and may not be the views or opinions of Equifax, Inc. and/or its affiliates.

No comments yet

Leave a Comment

Name :

Commenting guidelines

We welcome your interest and participation on this forum, but be aware that comments will be published at Equifax's sole discretion. Please don't use this blog to submit questions or concerns about your Equifax credit report or raise customer service issues. Instead, you should contact Equifax directly for all such matters and any attempts to do so in this forum will be promptly re-directed.

Some other factors to consider when commenting:
  1. Registration and privacy. While no registration is required to visit our forum, participants wishing to post a message must register by creating an account. All personal information provided by forum members incident to registration is governed by our Terms of Use and Privacy Policy.
  2. All comments are anonymous. We'll delete your name, e-mail address, and any other identifying information, including details about your investments.
  3. We can't post or respond to every comment - As much as we'd like to, we can't post every comment, nor can we guarantee that we will respond to each individual message. All questions or comments about your Equifax credit report or similar customer service issues should be handled by contacting Equifax directly.
  4. Don't offer specific legal, tax or financial advice. All of the materials on this Site are for information, education, and noncommercial purposes only and this forum is not intended as a means of expressing views or ideas regarding any specific legal, tax, or investment advice. While offering general rules of thumb is both permitted and encouraged, recommending specific ideas or strategies regarding investments, taxes, and related matters is prohibited.
  5. Credit Repair. This blog is not intended as a venue for the discussion or exchange of ideas regarding credit repair or other strategies intended to assist visitors and community members improve or otherwise modify their credit histories, ratings or scores.
  6. Stay on topic. Your comment should be concise and pertain to the specific post in question.
  7. Be respectful of the community. The use of profanity, offensive language, spam, and personal attacks will not be tolerated and egregious or repeat offenders will be banned from future participation. We encourage disagreement and healthy debate, but please refrain from personal attacks on our WordPresss and contributors.
  8. Finally: Participation in this forum may be terminated by Equifax immediately and without notice for failure to comply with any guidelines or Terms of Use. As such, you should familiarize yourself with all pertinent requirements prior to submitting any response through the blog or otherwise. All opinions expressed in this forum are solely those of the individual submitting the comment, and don't necessarily represent the views of Equifax or its management.

Equifax maintains this interactive forum for education and information purposes in order to allow individuals to share their relevant knowledge and opinions with other members and visitors. We encourage you to participate in discussions about personal finance issues and other topics of interest to this community, but please read our commenting guidelines first. Equifax reserves the right to monitor postings to the forum and comments will be published at our discretion. Do you have questions or comments about your Equifax credit report or customer-service issues regarding an Equifax product? If so, please contact Equifax directly. All opinions and information expressed or shared in blog comments are solely those of the person submitting the comments, and don't necessarily represent the views of Equifax or its management.

Real Estate Archive