Amount of mortgage based on salary?
Answer:
Mortgage companies use ratios to analyze your mortgage payment. The housing payment ratio (or front ratio) used in this calculation is 30%. The housing expense, or front ratio, compares your total mortgage payment to your monthly income. The total debt expense ratio (or back ratio) is 36%. This total debt expense, or back ratio, compares your total monthly obligations including your total mortgage payment to your monthly income.
There are other factors used to determine one's ability to qualify for a mortgage.
The amount of income to qualify for $500,000 mortgage would be the amount to equal 30% of the total monthly payment which includes the mortgage repayment (principal and interest), tax payment and insurance.
minimum 55-70,000/Year
You get approved for the amount of a loan based upon your debt to equity ratio.
In other words your income along with how much debt you have outstanding (like car notes, credit cards, school loans, etc) play a major role in deciding how much money the banker or lender would loan you.
It is generally from 40%-50% of your debt to income
Yes! Also your credit score, other outstanding debt, and other special factors.
one third of your income.
Depends on the mortgage payment that is determined by the interes t rate and the amortization period of the loan.
You should make at least the amount of your mortgage payment per week. So i you want a 100,000 house and payments are 1200 a month, then you should earn at least 1200 a week.
Supposedly, your rent and monthly utilities and taxes are not suppose to be more that 1/3 of your gross salary. But I think they've relaxed that rule, since houses have become so much more expensive.
the amount of the loan alone on a 800k mortgage is 26,000 a year for 30 years, now tack on 6% interest and it goes thru the roof. I would say you would want to make a minimum 55,000 a year
essentially, you want your mortgage payments to be less than 40% of your monthly earnings.
a rough estimate of what you need to earn for 500K would be upwards of 90K a year. as for an $800K loan, you would need to earn around $140K a year
ok well i'm in canada so I'll give you this in canadian funds
for a 500,000 home you would be having to make= 138,658 (annual income)
and for a 800,000 home you would be having to make= 219,622 (annual income).
I don't know exacltly what goes into someone getting approved for a mortgage. However, a $500K house on a 30 year mortgage would be over $2,000 a month and an $800 K mortgage over 30 years would be over $4,000 a month. Can you afford that?
It usu sally based on your total expense vs monthly gross income. the numbers the industry uses is 28% of your monthly income can be used for mortgage. so if your mortgage is $2k a month, you will need to bring in about $8400 per month in income.give or take a few hundred bucks!!
Good luck
its your salary times 3. so you need to make 164k-266k. you can go to a banks web site, some have mortgage calculators to play around with, rates continue to go up use 6.75 - 7 % to be safe.
Itm depends on if you go for a application wuth whats called stated income or if you go with proof of income such as W2s etc.You can get a mortgage based off of 15-20% of your income or other type .depends on your broker and or state too!
The old rules of thumb were: mortgage payment of 25 percent of earnings or 3-5 time annual salary. But then that was when you were expected to pony-up some 20 percent of the value of the house on your own in the down payment. My first house was for $18,000, so that was a tad bit easier back then for a simple 3 bedroom brick with a bath and a half. You are obviously dealing a tad bit more.
The general rule of thumb is 3x gross income equals eligible loan amount. S for mortgage of $500k you are looking at at least $125k in combined income.
It's not so much how much total you can qualify for, so much as the question is how much of a monthly payment can you qualify for. When you get pre-approved, and eventually approved for a mortgage, they base everything on your monthly payment and your monthly debt-to-income ratio. Mortgage companies calculate how much you make monthly, how much you would owe monthly (includes all debts, not just mortgage), and then figure out the percentage. You will be approved if the percentage falls within a range that you are allowed based on your credit, the amount of liquid assets you own, and the actual appraisal vs. purchase price of the home.
The reason why bad credit hurts you, is that it increases your interest rate, and therefore increases your monthly payment and your debt-to-income ratio as a result.
For a $500,000 house it depends on how long your mortgage is going to be there is 15yr 20yr and 30yr mortgages. if you have a 30yr mortgage for 500,000 its about $17,000 a year and if its 800,000 it about $27,000 a year. And, then there is property tax (that depends where you are going to live) and the bills a year so, you can figure the rest out.
With no revolving debt, lenders will lend up to 42% of your salary for principal interest taxes and insurance payment. So if you bought a 500,000 home put zero down and borrowed at 6.34% for 30 years your monthly payment would be 3245 principal and interest. Then you would have your property taxes which vary greatly from state to state. Assuming you have a 2% property tax rate your monthly prop tax would be 833.00. Insurance on a 500000 home would run you approximately $150.00 per month So your PITI would be 4228 per month. 4228 is 42% of $10066.66. So you would need that much income approximately $10000 per month to buy a 500K home at those rates.
Well, I must tell you one thing. I bought my home 20 yrs ago. I was fortunate enough to have a good credit, and control on my debts. It seems we are in the same wave length in that. I don't know what state you live in, but in most, it depends on what kind of mortgage (adj/fixed ) how many years (10,15,30 yrs x interest rate)
but usually they add up all your debts vs your income and they determine from that, how much you can afford. look at all those wonderful websites: buying a home they are very informative.
GOOD LUCK!
I would have to make about 120,000 to make those payments!!
a lot of factors to consider,like one sample if you have a lot of savings in the bank ,shall we say 100 thousand the lender will consider that with a minimum salary.it also depends on your credit score ,your debt and how many people are going to pay the mortgage loan.
They will often use a debt to income, but as a rule of thumb, credit unions and banks will extend you a loan up to 4.25x your salary.
Other mortgage brokers and so on will giev you more though, wlthough they may be a little skeezy.
Hope this helps!
I've heard 2.5 times your annual income is a good place to start. Also your debt to income ratio plays a big part. Generally, if more than 40% of your income goes to paying credit cards, car payments and the like, you may have a difficult time getting a loan.
Jim Reske, Realtor
ERA Advantage Realty, Inc
Port Charlotte, FL
http://www.flwaterhomes.com
different mortgage solutions exists, I have outlined some below
I would also suggest you read : http://umgarticles.atspace.com/mortgage..
Pension Plan
Using a pension plan to accumulate the balance of your mortgage is a tax free saving scheme. The balance of your
house will be saved over a period of time until you can pay your final balance. If you do intend to use a pension
fund to save for the balance of your house, consideration should be taken into account to open another pension
fund for retirement purposes too.
ISA Plan
With an ISA plan you invest in stocks and shares via an Individual Savings Account (ISA) - which is a tax-free
method of saving. This method of saving may not be suitable for most borrowers. Before considering this option you
should consult with an independent financial adviser.
Endowment
An endowment is still the most common type of interest only mortgage which also provides life assurance cover and
a fixed payment for investment. The endowment policy along with the interest only mortgage should in effect end
at the same time, leaving you with the ownership of your home and nothing to pay. Endowments have undergone
much criticism; this is due to investors being promised high returns from their investments. However lately this has
not been the case, borrowers have found their investments have been as good as expected and a shortfall in the
end amount of invested cash will not match the amount owed on the current property.
Taking into account the recent problems that have arisen regarding endowment policies it is worth remembering
that returns on endowment policies have been pretty good, however you do need to see the term out in full. Also
endowments do provide life assurance as part of the actual policy, so in the unfortunate event of a death the
mortgage balance is paid in full.
Advantages of an interest only mortgage
• Your investments and savings could accumulate more than the required amount to cover the final payment; this
could leave you more cash for your own personal use.
• Some plans have good tax benefits and help reach the required amount it a quicker and cheaper rate.
Disadvantages of an interest only mortgage
• In the unfortunate event of your investments not acquiring the designated amount of cash to cover the loan
repayment, the investor could face a shortfall which they will then need to pay. If you are worried about a shortfall
on your investment, you should keep in touch with your investor and request regular updates on the situation of
your endowment. If the worst comes to the worst, you can increase payments to compensate for the loss of
investment.
• Cashing in your endowment, ISA or pension could have adverse effects on the amount of money you have saved
over the past however many years. If you do decide to cash in any existing policies you may be subjected to a
penalty, this could be a cash amount specified by the investment company/lender. Please seek professional advice
if you are worried about the end results of your finances, don’t be too hasty as most policies accumulate more of
the cash in the final year
for a complete informational package I suggest you visit one of the many mortgage informational sites the best free
one in my opinion is :
also read http://umgarticles.atspace.com/mortgage..
This month's figures prove that the so-called "housing bubble" is not only real, but that its cratering faster than anyone had realized. As the UK Guardian reported just yesterday, "the orderly housing slowdown predicted by the Federal Reserve will (soon) become a full-blown crash".
All the indicators are now pointing in the wrong direction. Consumer confidence is down, inventory is at a 10 year high, and the number of homes sold in July was 22% lower than last year. As Paul Ashworth, chief economist at Capital Economics said, "Things seem to be getting worse very quickly. Freefall is a strong word, but I think it's the right one to use here." (UK Guardian)
The housing bubble is a $10 trillion equity balloon that will explode sometime in 2007 when more than $1 trillion in no-interest, no down payment, adjustable-rate mortgages (ARMs) reset; setting the stage for massive home devaluation, foreclosures and unemployment. ("By some estimates housing activity has accounted for 40% of all the jobs created since 2001". Times Online) July's plunging sales are just the first sign of a major slowdown. The worst is yet to come.
The blame for this rapidly-approaching meltdown lies entirely with the Federal Reserve, the privately-owned collection of 10 central banks who cooked up a way to shift wealth from one class to another through low interest rates.
Sound crazy?
Well, just as high interest rates cause the economy to slow down; low interest rates have the exact opposite effect by stimulating the economy through increased spending. It's all pretty clear-cut.
When the stock market nose-dived in 2000 the Fed lowered rates 17 times to an unbelievable 1% to keep the economy sputtering-along while the Bush administration dragged the country to war, gave away $450 billion a year in tax cuts, and awarded zillions in no bid contracts to their friends in big business. All tolled, the Bush-handouts amounted to roughly $3 trillion dollars, the largest heist in history, and it was carried out under the nose of the snoozing American public.
At the same time, America's debts and deficits have continued to mushroom behind the smokescreen of low interest rates.
Rather than face the recession which should have followed stock market crash, the Fed chose to increase the money supply (which doubled in the last 7 years) and lower the qualifications for getting mortgages. (I read recently that 90% of first time home buyers not only lie on their mortgage applications, but that 50% of them say that they earn TWICE as much as they really do. The applications are not cross-checked with IRS statements) Now, tens of thousands of Americans live in $400,000 and $500,000 homes without a penny of equity in them and with loans that are timed to increase dramatically in 2007. (Many of the monthly payments will double)
So, how can we blame the Fed for the reckless and irresponsible behavior of the average homeowner?
Well, because they knew the effects of their "cheap money" policy every step of the way.
First of all, the Fed knew exactly where the money was going. Greenspan endorsed the shabby new lending-regime which put hundreds of billions of dollars in the hands of people who never should have qualified for mortgages. They were set up to fail just like the victims in the stock market scam who kept dumping their life savings in the NASDAQ when PE's were shooting through the stratosphere.
Secondly, the Fed knew that wages had actually regressed (2.3%) since Bush took office, so they knew that the soaring value of real estate was entirely predicated on debt not real wealth. In other words, home values increased because of the availability of cheap money which inevitably creates a buying-frenzy. It had nothing to do with real demand or growth in wages.
And, thirdly, according to the Fed's own figures, "the total amount of residential housing wealth in the US just about doubled between 1999 and 2006"up from $10.4 trillion to $20.4 trillion". Times Online.
UP $10 TRILLION IN 7 YEARS! That is the very definition of a humongous, economy-killing equity monster. In other words, the Fed knew the ACTUAL SIZE OF THE BUBBLE and chose to steer it towards the nearest iceberg without warning the public.
This is what Greenspan called "a little froth".
There is no real growth in the American economy. Figure it out. Last year Americans saved less than 0% of their net earnings while they borrowed a whopping $600 billion from their home equity to piss-away on a consumer spending-spree. Once home prices begin to retreat, that $600 billion will evaporate, real GDP will shrivel, and the economy will begin flat-lining. (Consumer spending is 70% of GDP)
The Federal Reserve's plan is so simple; we shouldn't dignify it by calling it a conspiracy. It's merely a matter of hypnotizing the masses with low interest rates while trillions of dollars of real wealth is diverted to corporate big-wigs and American plutocrats.
It might not be rocket science, but it worked like a charm.
Now, the trap-door has been sprung; the country is dead-broke and all the levers are in place for a police state. As the housing-balloon slowly limps towards earth, the new Halliburton detention centers are up and running, the National Guard is in Rummy's control, the Feds are able to listen-in on every phone call we make.
The noose is beginning to tighten.
New Orleans was just a dress rehearsal for the new world order; 300,000 million Americans reduced to grinding poverty while the economy explodes into sheets of flames.
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