topic Re: help with mortgage math in Mortgage Loans

help with mortgage math

Anonymous — Fri, 29 Oct 2010 16:50:53 GMT

im a young kid. there is a good deal on a property that id like to purchase. ive asked on here before but im not really sure if i asked this question. i make close to 30k a year. 400 bucks a week. some weeks i get to work for other guyys and they pay me well.

i have a college loan in my name and a car loan in my name. college loan is 100 bucks a month and car loan is 400 a month. i live home so i can afford this on my own. my car is almost paid off and so is my college loan.

is the math that simple? as a bank, they see a kid makes 1600 a month and owes 500 a month to creditors leaving 1100 a month for a mortgage....

my credit is around 750 or higher. my ratios are ok. those two loans are all i owe. college and car.

im curious to know around what possible range i can get a mortgage in assuming the above scenerario? then assume i eliminate one of the loans (college or car) how much would that increase my borrowing power to a bank?

Re: help with mortgage math

DallasLoanGuy — Fri, 29 Oct 2010 17:26:39 GMT

monthly income * .45 less monthly obligation = available to use for mortgage payment.

30k /12 = 2500

2500 * .45 = 1125

1125 - 600 = 525 open to use for mortgage pmt and fit guidelines

depending on taxes and insurance.... the actual purchase price could vary to make your pmt 525

Re: help with mortgage math

DallasLoanGuy — Fri, 29 Oct 2010 17:27:42 GMT

this math addresses the back end or 'total debt' ratio.

does not consider the front end or 'housing debt ratio"

Re: help with mortgage math

Anonymous — Fri, 29 Oct 2010 21:06:28 GMT

$400 a week is only $20,000 a year. The extra $10,000 you make here and there probably wouldn't be counted as income for your loan purposes.

Re: help with mortgage math

DallasLoanGuy — Fri, 29 Oct 2010 22:21:49 GMT

yes. if it cant be proven then it cant be used.

and that would leave $0 avaliable for a mortgage payment

Re: help with mortgage math

IOBA — Sat, 30 Oct 2010 02:50:09 GMT

My suggestion would be to pay off the car loan ASAP!!!

Then pay off the student loan ASAP!!!

That will help you afford more house. The $400 car payment is really hurting you, in terms of debt to income ratio.

Good luck!

PS - if you are seriously looking to purchase a house, then start documenting EVERY deposit you make into your bank account. Several posters have mentioned that the lender has requested proof of a deposit or an explanation of a deposit. So start keeping track now! What I use to do is photocopy the deposit slip, along with the checks (to include paychecks). Any cash was kept on hand to pay for things I would normally put on a cc.