When the real estate market “woke up”, outlandish home prices had to come down because they weren’t based on real value. Rather, the over-pricing occurred because of greed which was at the root of much of the foolish lending and foolish borrowing of the last few years.

People say, “Real estate is local”. By that, they mean that what you experience in your neighborhood may be very different from what you see in the national news. Without a doubt, nationally, real estate has taken it on the chin and in the gut.

Because of this home prices have dropped significantly in many areas of the US. Some areas will continue to see home prices decline. In this bubble and its pop, lenders may have learned important lessons about loose credit. Home owners in some areas certainly have. And they’ve learned about the importance of affordability.

For years, one of the tips in Real Estate Calculator Suite has been this: “As tempting as it may be and even though you may qualify for a big loan, avoid buying more home than you can comfortably afford.” The temptation has been great in areas where home prices sky rocketed in recent years.

So, if prices are down in your neighborhood of the world and you plan on buying a new home, how do you know what “comfortably afford” means for you?

To my way of thinking, “comfortably afford” means a lot of things. It means that couples buy homes they can pay for even if one partner loses their job, wants to take off for children, or becomes disabled. It means there’s money left over for family fun. “Comfortably afford” means you don’t lay awake at night and thinking about how to stretch your budget.

Banks and mortgage lenders are returning to the concept of qualifying ratios: 28 for housing and 36 for debt.

If you want an easy way to see what safe lending standards indicate about the amount of home you can “comfortably afford,” use the Mortgage Qualifier in Real Estate Calculator Suite. It gives you a good idea of what you can expect to comfortably pay each month for your home. And it allows you to easily play with the numbers to see the effects of a pay raise or reduction in income.

Using the Mortgage Qualifier is easy. You enter your monthly income and your co-borrower’s monthly income, enter your monthly credit card, auto loan and other loan payments, and enter the amount you have available for a down payment.

As you enter your personal financial values, the calculator automatically updates the results to indicate how much you can comfortably afford.

The Mortgage Qualifier is one of 16 financial calculators in Real Estate Calculator Suite. It’s the one that will quickly get you in the home-buying ballpark in terms of what you can afford.

Real Estate Calculator Suite

Learn more about Real Estate Calculator Suite or Download a Trial Version and play with your own numbers.

Of course, you can purchase Real Estate Calculator Suite for your Windows-based computer for only $39.95 USD.