topic Re: Help me calculate max amount I can borrow ? in Mortgage Loans

Help me calculate max amount I can borrow ?

cuti — Tue, 19 Mar 2019 02:13:42 GMT

Sorry for this stupid question , but I can't figure out the max amount , combined income are :
myself : 2017 net income $14000 .. in 1099
2018 $26000 ...in 1099 (not filing yet)
spouse : 2018 $22000 in W2 + $ 6000 in 1099 form.
I need to know with this income combined together , how much I can borrow with 10k down payment . thank you all .

Re: Help me calculate max amount I can borrow ?

cuti — Tue, 19 Mar 2019 02:14:49 GMT

Sorry I forget to mention I have I auto loan with payment of 373 each month .

Re: Help me calculate max amount I can borrow ?

Revelate — Tue, 19 Mar 2019 08:26:31 GMT

Get that 2018 filed and cleared before you go shopping, going to need two years to claim the 1099 income anyway; also matters if your spouse has 2 years on that 1099 income too: the W2 income counts full monty.

Not entirely sure how 1099 over 2 years is calculated but I think it's an average, but will let one of the experts answer better as I haven't kept up with current lender DTI's either.

Re: Help me calculate max amount I can borrow ?

Mortgage-Specialist — Tue, 19 Mar 2019 17:24:49 GMT

The 1099 is viewed as self employed income. The amount underwriting will use will be the remaining net income after write-offs. Its a little more complicated than what I explained but this should give the gist of how it works.

Re: Help me calculate max amount I can borrow ?

CreditInspired — Tue, 19 Mar 2019 22:41:58 GMT

I don’t know but I do know that mortgages use gross income, not net income (from your paystubs).

Edit: Sorry about that. I see the net is for 1099 income.

Re: Help me calculate max amount I can borrow ?

CreditInspired — Tue, 19 Mar 2019 22:40:07 GMT

@cuti wrote:
Sorry I forget to mention I have I auto loan with payment of 373 each month .

What other debts between you and wife? any student or personal loans, any CCs, child payment, etc.

Re: Help me calculate max amount I can borrow ?

cuti — Wed, 20 Mar 2019 01:47:54 GMT

thanks so much for reply everyone ... we only have auto payment 373 and that it ... we looking to borrow around from 250k to 300k .

Re: Help me calculate max amount I can borrow ?

Xarquinn — Wed, 20 Mar 2019 03:20:23 GMT

Assuming you can include all of your and your partners 2018 income, you are looking at a max monthly housing payment of $1,395

Lenders have become much more strict since 2008 and it would be fairly difficult to find one that offers front end DTI's (P&I + Property Taxes + Hazard Insurance) higher than 31%. Back end DTI is around 42% so you are okay with the car loan. Not sure what the tax rate in your area is but assuming 1% will put your max loan amound ~230k (assuming a 4.0% interest rate), less if you are putting less than 20% down because you will have to obtain mortage insurance which is ~0.50% of the loan amount annually.

Definitally wait until you file your 2018 taxes.

Re: Help me calculate max amount I can borrow ?

Caardvark — Wed, 20 Mar 2019 03:21:22 GMT

Have you determined what the insurance and taxes are going to be? And, do you know whether you'll be required to pay PMI?

@4% interest, the mortgage payment alone will be $1200-$1400 p/month. Insurance, taxes and PMI would be additional.