Mortgage Formula

Has anyone ever heard of a formula for a mortgage? I read about it earlier but I do not remember the details. Essentially, what you're supposed to do is multiply your household income by a number and tells you how expensive a home you should be able to afford.

For example, (it's something and I'm over the top of my head, do not quote me) you take your family's annual income and multiply by 2 ½, so if you say you and the woman present a total of $ 75,000 per year, you want to be looking at the houses in the price range of $ 180,000.

If you try to buy too expensive a house you end up broke and / or foreclosure.

To avoid this, you want to get your finances in order before buying a house.

1) The cash reserve for emergencies (fresh 6 months)
2) 20% down.
3) other debt.
4) A house you can afford.

By "a house you can afford", I mean if you get a fixed rate mortgage over 15 years, payments will be only 1 / 4 of your net salary.

For a family making $ 75,000 / year or $ 6250/month.
After taxes, that's about $ 4400/month.
1 / 4 of that is your maximum mortgage payment, or $ 1100/month.

$ 1100/month * 6% * 15 = A $ 130,000 mortgage,

A $ 130,000 mortgage = $ 162.500 home, with 20% ($ 32,500) down.

$ 75,000 / year income, $ 162.500 home, means you have a factor of 2 1 / 6.

Banks like you that stretch to 2 1 / 2 or 3 times, but that's what helped the cause of all such seizures.

I would try to buy a house for only two times my income, and only 20% down.

Well, there are options for just about everything.

What I would do is determine the payment, including taxes and insurance and mortgage insurance if applicable, and see if I can afford it. Depending on your credit, debt ratio will be 40, 45% or 50%. Add all that will be displayed on the credit report, and the PITIM the, and divide by your total gross monthly income. It's your debt ratio.

They said that 25% of your income should go to housing and a total of 33% goes to all consumer debts. This is more realistic. You must use your head too. Think debt ratio like this: if your DTI (debt to income) is 50%, 50 cents of every dollar you earn goes to consumer debt. The remaining 50 cents is for food, clothing, gas, electricity, life insurance, medical copays, education, coffee and cigarettes. Is half of your income to the rest? The bank will say no more likely. But we understand by yourself.

Here is the calculator I use:
http://www.mortgage-calc.com/mortgage/si ...

The easy solution is that the bank is 30% of your monthly income must be equal to what your monthly payment should be morgtage. If your wife makes 75,000 a year less taxes then you should be looking for a mortgage payment of $ 1.750 per month. Thats in the range of about $ 230,000 to $ 300,000. Dollar House. It also depends on your debt ratio. What is a carpayment, student loans, credit cards, etc. Make a monthly budget with a mortagage payment false and should be able to help you decide what house you can afford the size of loans without interest Try a home loan fixed. Especailly because of the severity of the housing market is that you can find a great loan thats fixed.