I want to buy a Home, how much loan am I eligible for?

Question

I'm 33yrs old live in NJ, first time buyer. Earn $40,000 income, credit rating of 734, no credit card debt, car is paid off, only paying school loan of $41,000 my payment is about $320. *I also have $10,000 for a down payment. I know i can apply for a mortage and get an answer but i am not ready to start talking to people yet. Wondering if there is a recipe to figure out about how much I will have to work with!

Answer 1

House pmt. P&I taxes, Ins, MIP 1033.00 @ month, or a mortgage a 6.5 % = $140,000.00 mtg. or a sales price of $150,000.00 w/ $10,000.00 dn. The equation is the following G.M.I. = $3,333.00 a month X 31% = total mo. housing expense , $3,333.00 X 43% = $1,433.00 total debt including h.p. Based on $40,000.00 yearly income. f y i , $140,000.00 X 5.99 (6.5%) = $838.60, plus taxes and insurance. Hope this helps, Good Luck!

Answer 2

Your current debts are about 10% of your income and they want you under 35% max .

So , you should quality for a loan with payments of about $830 per month .
That would be principal , interest , property taxes , home insurance AND
Because you do not have 20% down , PMI .

I do not know what rate you would get on a 30 year fixed tho .

Ask 3 lenders for prequal letters .
They are free and only they can tell you the real numbers .

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Answer 3

Bankrate.com has a wonderful loan calculator. It'll tell you how much you qualify for based on your income and today's interest rates. You can also say what monthly payment you want to stay at, and it will tell you what price range to look in.
That's actually what I'd do - find a monthly payment that's comfortable to me & let that determine how much house to buy. They use 28 and 36% of income as the general rule, BUT if I used those numbers my monthly housing payment would be TWICE what it is now. I personally would prefer to have that money in my pocket to use for vacations, home improvements, etc.
Good luck!