Buying
Guide
How
Much House?
Qualifying
How Much Can I Afford?
Sources For Down Payment
How to Reduce Down Payment
One Caution
Figuring Housing Budget
Two Lender Formulas
More Mortgage Help
|
Two
Lender Formulas
Most lenders will require that loan applicants meet both guidelines
before approving a mortgage loan. The first formula compares income
to housing costs without including long term debts, the second includes
all debts.
28% Formula
Total Monthly Housing Costs
(P I. T I.)
__________________ = 28% (or less)
Gross Monthly Income
36% Formula
P.I.Tl. + All Monthly Debts
__________________ = 36% (or less)
Gross Monthly Income
A variety of other formulas exist. VA and some
lenders use a single ratio based on mortgage payment and all debts,
which allows easier qualifying for a more expensive home for a
borrower with little debt.
To
figure your housing budget, simply multiply your gross monthly
income (before taxes) by 28% and 36%. For example, a family with
a monthly income of $3,500 might qualify for a mortgage with payments
up to $980.
For specific figures, ask me Emilie.Christiansen@longandfoster.com
|
|
