Financial Tools
Achieving the American dream of homeownership is easier than
you might think. One of the first steps in reaching this goal is to understand
what you will be able to borrow and determining a monthly payment you can
afford. The mortgage industry has adopted several rules of thumb that will help
you get the process started.
A general rule of thumb states that you will be able to spend
28% of your total income on a mortgage payment. The following chart will help
you convert your annual income into a monthly payment. This payment includes
principal and interest only. Factoring in unknown variables including taxes,
insurance and homeowners fees will increase your monthly payment and reduce the
total loan amount you will qualify for.
|
Annual Income |
Monthly Payment |
| $20,000 |
$467 |
| $25,000 |
$583 |
| $30,000 |
$700 |
| $35,000 |
$817 |
| $40,000 |
$933 |
| $45,000 |
$1,050 |
| $50,000 |
$1,167 |
| $60,000 |
$1,400 |
| $70,000 |
$1,633 |
| $80,000 |
$1,867 |
| $90,000 |
$2,100 |
| $100,000 |
$2,333 |
How Much Will I Be Able To Borrow?
Once you have an idea as to what you can afford each month (chart shown above), the following table will give you an idea as to the amount you will be
able to borrow. Add your projected down payment to arrive at a purchase price
limit.
Monthly
Payment |
Loan Interest Rate / Loan Amount
5%
7%
9% |
| $467 |
$86,995 |
$70,194 |
$58,040 |
| $583 |
$108,603 |
$87,630 |
$72,457 |
| $700 |
$130,399 |
$105,266 |
$86,998 |
| $817 |
$152,194 |
$122,802 |
$101,539 |
| $933 |
$173,803 |
$140,237 |
$115,956 |
| $1,050 |
$195,598 |
$157,823 |
$130,497 |
| $1,167 |
$217,393 |
$175,409 |
$145,038 |
| $1,400 |
$260,797 |
$210,431 |
$173,995 |
| $1,633 |
$304,201 |
$245,453 |
$202,953 |
| $1,867 |
$347,791 |
$280,625 |
$232,035 |
| $2,100 |
$391,196 |
$315,646 |
$260,994 |
| $2,333 |
$434,599 |
$350,668 |
$289,951 |
These tables are designed to give you a basic idea of what to expect
as a homebuyer. It is important to recognize that your specific
situation is unique and there are numerous loan programs to choose from.
We are here to help you evaluate your options and select the program
that will be most advantageous.
Together we will find the best mortgage for you.
NEW HOMES
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