The mortgage amount you may qualify for can vary depending on several variables: your gross annual income, your total indebtedness, and your credit history. A rule of thumb in the mortgage industry used to be that the total of your mortgage payment, property tax, and homeowner's insurance should not exceed 28% of your gross annual income. If you have no other debt and have an excellent credit history, you will probably qualify for a higher percentage (i.e. a larger mortgage). The only way to know for sure what you may qualify for, is to speak with a bank loan originator to assess your specific situation.
The monthly payment chart will assist you in approximating what your monthly mortgage payment would be on a 30 year fixed-rate mortgage, based on the current rate of interest. The workspace below will assist you in calculating your Basic Housing Cost.
1. Enter your monthly payment from the chart __________
2. Add your monthly property tax________________________
3. Add your monthly homeowner's insurance:________________
BASIC HOUSING COST = monthly total 1+2+3