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re: Mortgage qualification
Posted on 1/12/17 at 5:26 pm to cfa626
Posted on 1/12/17 at 5:26 pm to cfa626
Don't pay it off if it only has 6 months left. They will not have to use it in your ratio's. Most people are surprised how high of an amount they would qualify for.
If you want to do the basic math yourself. Use 45% back ratio for a conventional loan or a 55% back ratio for an FHA loan. Include all debts on your credit report, Plus child support(if any), and other property(if any) obligations. After totaling together with your proposed housing payment divide by your monthly income.
Again don't pay off the car note especially since it is at zero. You will probably need that extra cash either for DP, closing costs, or all the expenses it takes to fill up a new home.
If you want to do the basic math yourself. Use 45% back ratio for a conventional loan or a 55% back ratio for an FHA loan. Include all debts on your credit report, Plus child support(if any), and other property(if any) obligations. After totaling together with your proposed housing payment divide by your monthly income.
Again don't pay off the car note especially since it is at zero. You will probably need that extra cash either for DP, closing costs, or all the expenses it takes to fill up a new home.
2
Posted on 1/12/17 at 6:23 pm to HYDRebs
quote:
Don't pay it off if it only has 6 months left. They will not have to use it in your ratio's
Why not? It's almost all principal at this point so it's his money either way.
Posted on 1/13/17 at 12:53 pm to HYDRebs
When my wife and I were in the market we basically just built a budget to see what we were comfortable paying.
We used our after tax & retirement earnings. Included our current expenses (gas/food/TV/phones...) that would not change with a new house, plus our current monthly obligations; then spoke to family and friends that had similar size houses we were looking at to see what there costs were for their utilities, insurance, maintenance, etc. Also set how much we wanted to budget for savings (Vacation, kids tuition, home repairs, auto repairs...). After that we used the remaining balance to back into what we wanted our mortgage payment to be and figured out how much house we wanted. We qualified for almost 150% of what we actually wanted to buy just to make sure we could maintain our standard of living.
All future bonuses & raises were then used to pay off debt, upgrade sections of the house, vacations....
We used our after tax & retirement earnings. Included our current expenses (gas/food/TV/phones...) that would not change with a new house, plus our current monthly obligations; then spoke to family and friends that had similar size houses we were looking at to see what there costs were for their utilities, insurance, maintenance, etc. Also set how much we wanted to budget for savings (Vacation, kids tuition, home repairs, auto repairs...). After that we used the remaining balance to back into what we wanted our mortgage payment to be and figured out how much house we wanted. We qualified for almost 150% of what we actually wanted to buy just to make sure we could maintain our standard of living.
All future bonuses & raises were then used to pay off debt, upgrade sections of the house, vacations....
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