| Steps To Buying A Home |
You can save yourself a lot of disappointment of falling in love with a home you can’t afford by getting yourself pre-qualified for a loan through a lender of your choice. Use the chart below and you can estimate the amount you can afford. A rule of thumb is, your mortgage payment (principal, tax, interest and insurance) should not be more than 28% of your gross monthly income before taxes. All of your monthly obligations including your mortgage payment should not exceed 36% of your gross monthly income. The 28% and 36% ratios apply only to conventional loans. FHA and VA Loans have different criteria.
Gross Yearly Income |
28% of Gross
Monthly income |
36% of Gross
Monthly income |
| $15,000 |
$350 |
$450 |
| $20,000 |
$467 |
$600 |
| $25,000 |
$583 |
$750 |
| $30,000 |
$700 |
$900 |
| $35,000 |
$817 |
$1,050 |
| $40,000 |
$933 |
$1,200 |
| $45,000 |
$1,050 |
$1,350 |
| $50,000 |
$1,167 |
$1,500 |
| $55,000 |
$1,263 |
$1,650 |
| $60,000 |
$1,400 |
$1,800 |
| $65,000 |
$1,516 |
$1,950 |
| $70,000 |
$1,633 |
$2,100 |
| $75,000 |
$1,750 |
$2,250 |
| $80,000 |
$1,867 |
$2,400 |
| $85,000 |
$1,983 |
$2,550 |
| $90,000 |
$2,100 |
$2,700 |
| $95,000 |
$2,217 |
$2,850 |
| $100,000 |
$2,333 |
$3,000 |
Your Lending institute will give you a 'Truth in Lending Expense Sheet' to show you all of the expenses that you will be charged when you make a loan. These vary from bank to bank so make sure your are not paying a lot of unnecessary points to obtain the loan. Always check at least 2 places for their closing costs. You might want to pay points to lower the interest rate. |
