I'm trying to figure out what house i can afford. I'm single w/ no kids. Make $45,000 a year.
2007-01-09 05:55:18 · 9 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
According to the general qualifications for a conventional loan, the principal, interest, taxes, property insurance, private mortgage insurance, and any applicable condominium or homeowner association fees shall not exceed 28% of your gross monthly income. (28% of $45,000/12=$1050 maximum)
However, you have to factor in your monthly debts. The PITI, fees and your monthly debts cannot exceed 36%. (No more than $1134 if my math is correct)
Of course, you should try to put as much down as possible to buy down your debt. Try not to go for a 100% mortgage. If you can afford it, try to put a down payment of 20%. Go for a fixed conventional mortgage, not one with an Adjustible Rate (ARM). Also, make sure your property taxes are manageable. They can go up annually. Your Realtor can help you when you're ready.
2007-01-09 06:32:25 · answer #1 · answered by somatek 2 · 0⤊ 0⤋
I work in the mortgage business as a Mortgage Specialist and through out the many loan programs out there most stick with the 45% rule. With non conventional (higher rates for those with less than perfect credit) they will go as high as 50%...but that may not be the way to look at when you are considering your debt load. My email is bnbt2004@yahoo.com if you have any other questions I may help you with. If not good luck to you and happy house hunting!
2007-01-09 06:29:03 · answer #2 · answered by Ladybug 2 · 0⤊ 1⤋
It is called the housing ratio and is 28-33% for a conventional loan. This is merely a guideline, and a person with exceptional credit and sizable down payment can qualify for as high as 50%
Another ration that is highly considered is called the debt ratio. This is the housing ratio, plus any minimum payments on credit cards, any car loans, ect...
What they do not normally consider are things like utilities, cell phone bill, cable or satellite television bills, ect.
2007-01-09 06:03:55 · answer #3 · answered by wanderingphotographer 3 · 0⤊ 0⤋
You should keep your housing payment around 35% or less of your gross monthly income. Total debts including housing shouldn't exceed 45%. Anything more is stretching you pretty thin, though lenders can often get you close to 60% if you have good credit.
$45,000/year = $3750/mo. 35% = $1312.50/mo for housing.
2007-01-09 06:21:19 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Loans use:
28% house debt
36% total debt.
Your monthly income is $3,750, so your total house payment (including principle, interest, property taxes and homeowner's insurance) should not be more than $1,050.
This is a good number to go by, though lenders can get you approved for up to a 55% debt ratio.
2007-01-09 06:52:55 · answer #5 · answered by KL 5 · 0⤊ 0⤋
The bank will tell you 40% and even loan you that much. In my experience 25% is about right. So according to your salary you should be ok with about an 8-900 / month mortgage.
2007-01-09 06:00:20 · answer #6 · answered by tchem75 5 · 0⤊ 1⤋
The bank calculates up to about 30 percent of your gross income for all monthly bills
2007-01-09 06:03:26 · answer #7 · answered by DAD_to_3 3 · 0⤊ 1⤋
Shawn already has enough debt. He shouldn't be looking to get a mortgage right now.
2016-05-22 23:18:27 · answer #8 · answered by Anonymous · 0⤊ 0⤋
it should be the % you can afford with out struggling.
2007-01-09 05:59:39 · answer #9 · answered by brian l 3 · 0⤊ 0⤋