1: Mortgage Payment and 2. CC

SilverBerries · ‎03-03-2017

Hi,

I have two hypothetical-type questions that I'm not expecting exact answers to, but a thought or two would be great.

#1. Loan officers are always saying things like, "well, if we go with Plan B it'll only increase the payment $35.00/mo and if we go with Plan C, it'll decrease it by $19.00/mo. How do they make that determination? For example, if I'm currently looking at a $205,000 loan (before the 20% down) but I increase that to $220,000 (before the 20% down) what kind of ballpark difference would it make in the monthly mortgage? I read somewhere at one time there was a way - based on your interest rate - to figure it out. They actually had a chart. Of course, all figures were just approximations, but as I'm trying to decide what I want to spend on a house I'd like to know what I can look at. What I want to spend, and what they SAY I can spend are not the same because I don't want a huge amount of my check going for a mortgage payment. So, if my interest rate (conventional) is between 4% and 5% (based on where we see the market now) and I want to increase my purchase upwards by $15,000-$20,000, how would that affect my bottom-line monthly payment? Ballpark.

#2. I want to replace a couple of appliances in my kitchen before putting the house on the market. I'm going to put it on my DIY store's credit card. However, I have a bonus coming the end of March so I'll pay for the appliances in full when they come in. It'll increase my usage a bit on the card, but I should still be below 50%. Is that going to play havoc with my Fico score? If so, should it bounce back at the end of March when I pay it off? I don't want to mess up my scores - especially since I'm already through underwriting - but I really want to change out those appliances before it hits the market.

Thanks for any input.

SB

StartingOver10 · ‎03-03-2017

Q1: You can use a mortgage calculator but for quick and dirty calculations try using the mortgage constant table.

Here is a basic chart for mortgage constants. https://www.realdata.com/book/mtg_constants.pdf

This helps if you want to do a rough calculation for example - an extra $25k on a given property.

I find that property taxes and HOA monthly fees and HOI have more of a direct impact on your monthly payment.

Make sure the LO has supplied to you a detailed worksheet so when you add $40 for a $10k increase in price you are in the ballpark because you started off with a good number. Your interest rate isn't locked in until you have a contract so any figures you have are subject to the actual date you can lock in your rate.

Q2: Yes your score will go back up, but it won't do that until the new balance reports. Chat with your LO first before making a big expenditure. BTW, SS appliances do get more for your home - I see it all the time.

Anonymous · ‎03-03-2017

The chart is principle and interest payments per $1 of loan? Why is it only a rough calculation? Thank you.

SilverBerries · ‎03-03-2017

...and this is what all loan officers use? Because it was EXACTLY what he quoted me. This is a very valuable resource. Thank you.

StartingOver10 · ‎03-03-2017

I say rough because there isn't the mortgage insurance amount if you are using FHA or a conventional loan with less than 20% down. But it does give you the right amount for P&I and the mortgage constants are accurate.

Anonymous · ‎03-05-2017

Thank you!

SilverBerries · ‎03-14-2017

Dang! Just lost another one.

I'm getting tired of going through this mourning process every time we lose out to another bidder. It hurts to lose a home that you've really become attached to and are already building dreams around. Sigh.

SB

Anonymous · ‎03-14-2017

So sorry to hear that - You dont want to bid on a house you dont love so when its a no, it really stinks. I wish I could help but all I can say is I feel for you!

StartingOver10 · ‎03-15-2017

@SilverBerries wrote:
Dang! Just lost another one.

I'm getting tired of going through this mourning process every time we lose out to another bidder. It hurts to lose a home that you've really become attached to and are already building dreams around. Sigh.

SB

Keep at it. You will find the right home and get it first. I know it is frustrating to find several homes and make offers and lose them to others. Find out from your agent what you can do to turn the tide your way. Sometimes it is just a small change (other times it isn't): for example, fewer inspection days, higher price, fewer contingencies, letter to seller are some of the ways you can change your offer to get acceptance in a multi-offer situation.