Apartment Affordability Calculator

How to Use the Apartment Affordability Calculator

The Apartment Affordability Calculator is designed to help you determine how much home you can afford based on your financial situation. Follow the steps below to efficiently use this calculator.

Step 1: Gather Your Financial Information

• Annual Gross Income: Find out your total income before taxes for the year. You will enter this amount in the field labeled “Annual Gross Income ($)”.
• Monthly Debt Payments: Add up all your current monthly debt payments, such as car loans, credit cards, and student loans. Input this total in the “Monthly Debt Payments ($)” field.
• Credit Score Range: Identify your current credit score and choose the corresponding option from the dropdown list. This will influence your housing budget range.
• Available Down Payment: Determine how much you have saved for a down payment and enter this figure in the “Available Down Payment ($)” field.
• Expected Annual Interest Rate: Input the current market rate for mortgage interest in the “Expected Annual Interest Rate (%)” field. Make sure it falls within the supported range of 0.1 to 20 percent.
• Annual Property Tax Rate: Enter the local property tax rate in the “Annual Property Tax Rate (%)” field. The accepted range is 0 to 5 percent.
• Annual Insurance Rate: Estimate your expected insurance rate and fill in this rate in the “Annual Insurance Rate (%)” field, ensuring it is between 0 and 2 percent.

Step 2: Review Input Information

Double-check your inputs for accuracy. Ensure all required fields are filled and compliant with the mentioned validation rules. For example, income should not be negative, and interest rates should be within the prescribed range.

Step 3: Interpret the Results

Once you have entered all your information, the calculator will compute several results that will help you understand your housing affordability better:

• Monthly Gross Income: This is your annual income divided by 12, providing a monthly income figure.
• Maximum Monthly Payment (28% Rule): This shows the maximum monthly housing payment you can afford based on 28% of your income.
• Maximum Total Monthly Debt (36% Rule): This indicates the maximum total debt payments you can afford each month, calculated as 36% of your income.
• Available for Housing Payment: This is the amount from the maximum total monthly debt that is available for housing payment after deducting your current monthly debts.
• Maximum Home Price: This calculates the maximum home price you can afford based on your financial inputs including the credit score factor.
• Recommended Home Price: This suggests a slightly conservative maximum price for the home purchase, calculated as 90% of the maximum home price.

By carefully following these steps, you can effectively use the Apartment Affordability Calculator to assist you in making informed decisions about your potential home purchase.