Mortgage Questions

[jclark1183]

Here are the facts in my situation:

Credit - All 3 scores well over 760 (0 negatives, 1% usage on total credit lines of $60k)

Income - $106K

Source of Income - Salary

Monthly Debt - Car loan of $520 per month, no other debt

Employment - W-2, same employer for 8 years

Assets/Reserves - $30K in liquid savings, $125K in investments (primarily retirment accounts)

Location - Indiana

Property - Single family home

1) How much mortage could I qualify for under this set of facts?

2) Would a piggyback loan of 90/10/10 be a possibility to avoid PMI?

3) Since I like would struggle to come up with a 20% down payment, are there other options available to avoid PMI?

My wife also has excellent credit and small monthly debts, but we would like to qualify with only me on the application.  Her data is not included above.  Thanks in advance for any advice!

[BrianB_The_Loan_Professor]

43% is the best number to use for determining how much you can qualify for - it may be more than what you need or want but for sake of how much here is a break down

$106,000 divided by 12 months = 8833 per month

43% of that is $3798 per month for all debts including housing

subtract the $520 and it leaves you with roughly $3248 for a mortgage

This will put you towards the cap of a conventional loan ($417k)

possibly even into Jumbo range

For good credit an 80/10/10 is available but you may also want to look at the one time upfront conventional MIP

it is like the fha upfront except it eliminates the monthly

This way you keep one payment with the lower rate (seconds tend to have a higher rate)

Good Luck

Brian

[jclark1183]

Brian - thank you.  I had forgotten about upfront MIP.  Is there a good rule of thumb for calculating the cost of this?  Obviously, I would like to avoid the second loan at a higher rate if at all possible; just not sure how the math would work out.  

We would like to keep the mortgage amount to $300k or less, so it is good to know we'd have a decent chance to do this without adding my wife to the application. 

[BrianB_The_Loan_Professor]

The upfront option is calculated on score and loan to value - 

It can be as low as 1.5% and as much as 3% (rough numbers)

with 10% down and your scores you should be in the 2% to 2.5% range

It is a big cost but usually pencils out as a big savings - 

Your income will easily support the 300k 

[jclark1183]

Great - it's good to know the options that are out there before starting the process.  Thanks!