Tip For Mathematical Mortgage Formula [mortgagefraud101.blogspot.com]
Question by Jeremy J: Mortgage formula? Has anyone ever heard of a "mortgage formula"? I read about this a while back but I can't remember the specifics. Essentially what you are supposed to do is multiply your household income by a certain number and that tells you how expensive of a home you should able to afford to purchase. For example, (and this is something I am making up off the top of my head, so don't quote me) you take your family's annual income and multiply it by 2½; so if say you and you wife bring in a total of $ 75,000 a year you want to be looking at homes in the $ 180,000 price range. Best answer for Mortgage formula?:
Answer by Joey21
The easy way that the bank does it is 30% of your monthly income has to equal what your monthly morgtage payment should be. If your wife makes 75,000 a year minus taxes then you should be looking for a mortgage payment of $ 1,750 a month. Thats in the range of about $ 230,000 to $ 300,000. dollar house. This also depends on your debt to income ratio. Which is a carpayment, student loans, credit cards, etc. Do a projected monthly budget with a fake mortagage payment and that should be able to help you decide what size house you can afford, no intrest only loans, try a fixed home loan. Especailly because of how bad the housing market is you can find a great loan thats fixed.
Answer by Jeff
If you try to buy too expensive a house, you'll end up broke and/or foreclosed. To avoid that, you want to have your finances in order before buying a house. 1) Cash in reserve for emergencies (6 month's expenses) 2) 20% down. 3) No other debts. 4) A house you can afford. By "a house you can afford", I mean that if you get a 15-year fixed rate mortgage, the payments will be no more than 1/4 of your take home pay. For a family that makes $ 75,000/yr, that's $ 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 years = A $ 130,000 mortgage, A $ 130,000 mortgage = $ 162,500 house, with 20% ($ 32500) down. $ 75,000/yr income, $ 162,500 house, means you have a 2 1/6 factor. The banks like you to stretch that to 2 1/2 or 3 times, but that's what's helped cause all of these foreclosures. I would try to buy a house for only two times my income, and then only with 20% down.
Answer by daeve930
Well, there are formulas for pretty much everything. What I would do is figure out the payment, including taxes and insurance and mortgage insurance if that will apply, and see if I can afford it. Depending on your credit, the debt to income ratio will be 40, 45% maybe 50%. Add up everything that will show up on the credit report, plus the the PITIM, and divide that by your total gross monthly income. That's your debt ratio. They used to say that 25% of your income should go to housing and a total of 33% go to all consumer debt. That's not very realistic anymore. You have to use your own head too. Think of debt ratio like this: if your DTI (debt to income) is 50%, 50 cents of every dollar you earn goes to consumer debt. The other 50 cents is for food, clothes, gas, utilities, life insurance, medical copays, tuition, coffee and cigarettes. Is half your income enough for everything else? The bank will say no, most likely. But figure it out for yourself. Here's the calculator I use: http://www.mortgage-calc.com/mortgage/simple.php
Mortgage payment calculations formula
mortgagefraud101.blogspot.com Mortgage payment calculations formula
The U.S. Consumer Financial Protection Bureau is close to revealing the details of its marquee project: reducing the reams of paperwork that borrowers must hack through when getting a mortgage. Simpler U.S. Mortgage Forms May Include New Cost Formula
Are you aware of the mathematical mortgage formula used when computing for your monthly mortgage? Not only this information is used in determining the monthly payments but also it can be used as a planning tool in taking estimates of the best and possible home loans that you can avail.
All you need is a good understanding of numbers and equations. If you really need this formula, the internet is a good resource tool. Often times these sites offer free monthly mortgage computation which can help you determine the price that you can afford and also enable you to plan ahead. Factors such as the current mortgage rates within your area and the number of lenders determine the possible mortgage rate for your loan.
For instance if the current rates are 4%, 5% and 6%, you need to get the average, which is to get the sum of the three rates and then divide the total into three.
In this example, the possible rate can be 5%. If you are planning to purchase a real estate amounting to $ 100,000, multiply this to the possible mortgage interest rate, you will get $ 5,000. Divide this into twelve monthly payments; you'll get $ 416.67 monthly amortization. This simple computation is actually a bird's eye view in for lay.The thing behind this formula is a series of complex mathematical equations. That's why there is a separate branch or study for this, which is the mathematics of investment. In order for you to spare yourself with these long and complex equations, the internet is a great place to begin your monthly mortgage calculations.
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