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Commuting Costs and Mortgage Rates

Different locations have obvious advantages and disadvantages, but homebuyers often forget an important factor: commuting costs.

Some lenders consider commuting costs if the buyers' weekly commutes exceeds a certain number of miles.  That monthly cost increases the buyers' overall debt-to-income ratios (DTI) and directly impacts how much money they can borrow.

Whether the lender doesn't consider commuting costs or the commute exceeds the number of "free" miles, homebuyers on budgets should keep their commutes in mind.  For example, if paying $5 to commute to work and then $5 to get home, that's $10 a day.  While that doesn't seem like a lot, it adds up quickly. If commuting five days a week, that's an extra $2,600 every year.

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