how much house can i afford?

I would suggest doing a 15 year note so you don't pay an assload in interest. I would guess you should be looking in the 220 to 240k range

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how much of a house I can afford?

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Judging by what info you give I would say 160-220K.

How much income you make relative to debt is important.

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What would the difference be if I put down 10000?

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You would not have 20% down therefore you would be paying about 90 bucks a month in PMI

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In the $1,800 amount, did you figure in the tax savings of deducting the interest? Are property taxes included in that figure?

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Not to start a political thread, but when I looked at buying a house, I didn't use any of these tax deductions in deciding what I could afford. I know that those tax breaks could be taken away at any time.

I would also recommend finding out when the reassessments are for your area. If you're coming up near the end of the cycle, your property taxes could increase soon. Some municipalities have been using these to increase revenue as well.

Traditional guidelines say: 2.5x to 3.0x your gross annual income.

You honestly do not give enough information to answer the question correctly but from what you have given I would say this. Conventional loan $275,000 would be max if you have great credit at 4.5% rate for today. 5% down would be $13,750 down and putting $20k down would not get you to 90% LTV. Conventioanl MI is determined by credit score and LTV. No matter how much you put down on FHA you pay the same monthly MI rate of 50bps and upfront MIP of 2.25% on 30yr fixed. This could go up soon as bill is in congress or passed congress that will make monthly MI risk based. At 95% LTV $261,250 your P&I would be $1323.73 and your taxes depending on parish would be approx $158.31, insurance would be approx $125 and MI would be approx $152 giving you a total pmt of $1759.04. Your total debt ratio will determine what you can borrow and just b/c you qualify for an $1800 pmt does not mean you should. 15yr terms are great but if something happens to your job you are stuck at the higher pmt which would be close to $1900 just P&I. Like I said not enough info to give you an honest answer but never buy max of what you can afford. Buy something more reasonable and save what you can and pay extra to pay off early and save on total interest paid. Rates at 4.5% on 30yr fixed are unheard of so it's not like what you would get is traditionally higher than what 15yr would normally be. Good Luck

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I would suggest doing a 15 year note so you don't pay an assload in interest. I would guess you should be looking in the 220 to 240k range

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I like the idea of the getting a traditional 30 year mortgage, but paying at a 15 year rate. That way, if times ever got tough, we could go back to the 30 year rate.