Many financial advisors believe that you should not spend more than 28 percent of your gross income on housing costs, such as rent or a mortgage payment, and that you should not spend more than 36 percent of your gross income on overall debt, including mortgage payments, credit cards, student loans, medical bills and the like. If you're not sure how much of your income should go toward housing, follow the tried-and-true 28/36 percent rule. Many borrowers put down as little as 3 percent. How much to put down. While 20 percent is thought of as the standard down payment, it's not required.If you're spending more than you can afford. The Mortgage Calculator provides an overview of how much you can expect to pay each month, including taxes and insurance.However, pay close attention to how much your monthly mortgage payment can change when the introductory rate expires. A 5/6 ARM - which carries a fixed rate for five years, then adjusts every six months - might be the right choice if you plan to stay in your home for just a few years. Initial rates for ARMs are typically lower than those for their conventional counterparts. If an ARM is a good option. As rates rise, it might be tempting to choose an adjustable-rate mortgage (ARM).If you have some room in your budget, a 15-year fixed-rate mortgage reduces the total interest you'll pay, but your monthly payment will be higher. These loans come with lower monthly payments, although you'll pay more interest during the course of the loan. The loan length that's right for you. If your budget is fixed, a 30-year fixed-rate mortgage is probably the right call.To study various scenarios, just change the details you enter into the calculator. As you shop for a purchase loan or a refinance, Bankrate's Mortgage Calculator allows you to estimate your mortgage payment.
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