Use SmartAsset's free New York home loan calculator to determine your monthly payments, including PMI, homeowners insurance, taxes, interest and more. The Federal Housing Administration's formula, used by many lenders, recommends allocating no more than 31 percent of your monthly income to your housing payment. This figure will change depending on the amount of your debt. Buyers without other debt can budget up to 40 percent of their monthly income for housing.
But remember that the rest of your budget will need to be spent on heating, water, electricity, routine home maintenance, and food. If you're still not sure how much you can spend on buying a home, consider the general 30% rule. It states that your mortgage should not exceed 30% of your monthly gross income, plus or minus 2%. When using the 30% rule to determine housing affordability, you should also consider your other debts.
Instead, prospective homeowners need to make sure they can afford the home they are buying and still meet their other monthly obligations. Open houses can help you get an idea of the housing stock in the area and what is meant by a dog-trotting house or a railroad floor. Buying a home includes many one-time fees, and those closing costs are especially high in New York.