When buying a home in Austin, it's important to set a financial "comfort zone" for yourself.
Some people think a mortgage lender will do this for you, since they won't lend you more than they think you can afford. This is not the case. You should never let a mortgage lender set your spending limits for you. They will loan you a certain amount based on your risk profile, which comes from your credit score / FICO score. But their maximum amount might be higher than what you're comfortable paying. So you need to set your own maximum loan amount.
Mortgage calculators are a good way to do this. You can use them to determine the approximate monthly payment on a home loan. In this way, mortgage calculators can help you set your "comfort zone" for mortgage payments.
To determine your mortgage comfort zone, you need three things: a budget, a price and a mortgage calculator. For the price, just start with the cost of a house you think you might be interested in buying.
At first, don't worry about whether the price is too high -- you'll find that out soon enough when you run the numbers.
Next, run the home price through a free mortgage calculator at current interest rates and at a 30-year fixes mortgage. (You might choose a different mortgage type later on; but this exercise is just to get a ballpark mortgage payment based on home price, so choose the 30-year fixed option for the sake of simplicity.)
Mortgage loan calculators can easily be found on the Internet. Just type "mortgage calculator" into any major search engine, and you'll find several. We also a variety of free mortgage calculators at the Home Buying Institute.
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