Friday, July 31, 2009

A Borderline Home Buyer as Benchmark: Can I Afford This House?



Home Affordability "Benchmark"


This post discusses the "Borderline Buyer" column of the Planning to Buy a House Spreadsheet. The previous post covered the Proposed Purchase column. As you might guess, the Borderline Buyer column develops a profile of a borderline buyer for the property you are proposing to purchase.

My borderline buyer is pushing the typical debt load limits. As a result he should not thought of as a benchmark in the sense of being a buyer to be emulated. He is just barely able to afford this house! In my opinion, a buyer's objective should not be to get as close as he possibly can to the lender's limits; the closer he is to these limits, the closer he is to the limits of his ability to manage his debt (and the more he is at risk of ultimately losing his home). Still, this is a great buyer to compare yourself against.

Excel spreadsheet to evaluate/benchmark purchasing a home affordabilityNote: Click on the above screenshot to expand it. The link to download the spreadsheet is at the end of the post.

The Borderline Buyer Column


Above is a portion of the Excel spreadsheet (click to enlarge. The link to download is at the end of this post). The benchmark buyer column represents

Sunday, July 19, 2009

Planning to Buy a House Spreadsheet



Home Affordability Calculator: How Much House Can You Afford?


This spreadsheet can help you evaluate a proposed home purchasing plan for reasonability, and answer typical home purchase related questions such as, given your salary/income:
  • What price can I afford to pay for a house?
  • What size home mortgage loan can I qualify for? How much will I be able to borrow?
  • When will I be able to afford to buy?

Note: Click on the screenshot below to expand it. The link to download the spreadsheet is at the end of the post.

Planning to buy a home Excel spreadsheet/calculator

The spreadsheet will also help you overcome some of the issues raised in The Disadvantages of Buying a House and Planning to Buy a House by helping you to budget adequately for typical expenses and at the same time keep those expenses within standard established income & debt-load guidelines.

Buying a House Spreadsheet: Primary Inputs


The primary inputs (blue cells enclosed in black borders) to the model are:

Thursday, July 2, 2009

Notice

Until I finish recovering from surgery I will be posting less frequently than normal. I hope to be back to my normal "schedule" by the end of the month.