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Edwin Fishel Tuccio |
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Edwin Fishel Tuccio |
Mortgage
Figure out how much you can borrow for a home loan!
The borrower, as well as the property, must qualify in order to get a mortgage. To qualify borrowers for a loan with a down payment of 20 percent, lenders generally use the 28 to 36 percent ratio. That means house payments cannot exceed 28 percent of the borrower's monthly income before taxes. Total debt, including other outstanding loans, cannot exceed 36 percent. To estimate how much money you can qualify to borrow use the following formulas:
Income Ratio Method 28% Example Your Figures
Gross monthly income $4,167 __________
(self & co-borrowers X .28) X .28 X .28
Maximum monthly payment
amount (principal, interest,
taxes & insurance) = $1,167 __________
Total Debt Ratio 36% Example Your Figures
1. Multiply your gross monthly $4,167 __________
income by .36 X .36 X .36
Gross monthly income A = $1,500 A =______
(self & co-borrowers)
2. Add up your outgoing __________
monthly payments
Car payments $200
Alimony $125
Child support $150
B = $475 B = ________
3. Subtract B from A to get Total +
maximum monthly payment $1,025 __________
To calculate your monthly mortgage payment from the chart below:
1. Find the number of years for the term of your loan across the top.
2. Find the percentage rate of your loan along the left side.
3. The place on the chart where the year column meets the percentage row is your factor number.
4. To calculate your estimated monthly payment, multiply your factor number by the amount of your loan in thousands (for example, 40 for $40,000, 75 for $75,000, etc.) Here's an example: if you are financing $50,000 for 15 years at 7percent, multiply 50 times 8.99 (the factor number).
Your total is $449.50 - so your monthly payment, including principal and interest, will be $449.50.
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