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Old 05-17-2007, 02:28 PM
 
73 posts, read 480,385 times
Reputation: 31

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A monthly mortgage payment (including insurance/tax) that equals exactly half of your after-tax take home for the month.
example:

Monthly after-tax income: $3,800
Monthly mortgage/insurance/tax: $1,900

assume no other debt (car,loan,whatever)
Is that reasonable?
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Old 05-18-2007, 08:40 AM
 
73 posts, read 480,385 times
Reputation: 31
I am pretty sure I would qualify for whatever the best rate offered is with my credit score and income level. I will be looking for something in the 330k range, as I'll be putting down ~60k downpayment. It seems like a fairly favorable buyers market right now, and will likely continue in that way at least through the end of the year (from all I've read). I am planning to make a move in the winter.
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Old 05-18-2007, 08:58 AM
 
Location: North Port , Fl.
10 posts, read 24,718 times
Reputation: 15
If your net income is 1800, figuring 30% tax bracket, your gross is around 5K per month. If you have no other bills like you say, then the $1800 net you claim would actually fit the old criteria of 36% back ratio. $330K sale price - $60K down, = $270K loan amount. That would give you an 81.81% loan to value. You would actually need to put a little more down to stay at the 80% Loan to Value which enables you to eliminate PMI( Mortgage Insurance Primium). With a middle score of 720 or better, you should be able to qualify ( depending on your geographical location ) for the best rates, say currently at 6.250%. So, 264,000@6.250% for a 30 year fixed rate would have your Principal and Interest at $1625.49 per month. This would leave you with $2174.51 per month for Taxes and Insurance and all other living cost like gas, food, electricity etc.
In my professional opinion, you are sitting in a very good position to buy and depending on your lifestyle, should not have difficulty in making your monthly paymens and still be able to "live".
This is a lot of assuming, but it's what I had to work with. (mortgage broker, florida)
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Old 05-18-2007, 09:34 AM
 
73 posts, read 480,385 times
Reputation: 31
Quote:
Originally Posted by timlinville View Post
If your net income is 1800, figuring 30% tax bracket, your gross is around 5K per month. If you have no other bills like you say, then the $1800 net you claim would actually fit the old criteria of 36% back ratio. $330K sale price - $60K down, = $270K loan amount. That would give you an 81.81% loan to value. You would actually need to put a little more down to stay at the 80% Loan to Value which enables you to eliminate PMI( Mortgage Insurance Primium). With a middle score of 720 or better, you should be able to qualify ( depending on your geographical location ) for the best rates, say currently at 6.250%. So, 264,000@6.250% for a 30 year fixed rate would have your Principal and Interest at $1625.49 per month. This would leave you with $2174.51 per month for Taxes and Insurance and all other living cost like gas, food, electricity etc.
In my professional opinion, you are sitting in a very good position to buy and depending on your lifestyle, should not have difficulty in making your monthly payments and still be able to "live".
This is a lot of assuming, but it's what I had to work with. (mortgage broker, florida)
Thanks Tim, this is a very informative reply. My net income is slightly higher at 1860, as well as quarterly bonuses that typically ad up to another net figure of 1500 per quarter.

I am looking at places that range anywhere from 345-350k, I am assuming due to the "somewhat" favorable buyers market that I can get them to come down to ~330k. Does that sound reasonable?

As far as PMI is concerned, I often hear from people that being a first time home buyer with good credit score (760) I should be able to get a no PMI loan even if I put down less than 20%? Is there merit to that? In either case I can get the PMI dropped fairly soon as I'll be within a few percentage points of the 20% down payment. As far as the rates go, if I go to cnn.com and look at the loan rates at the bottom, I see 5.84% for 30 year loans. Is that considered the "prime" rate, a rate which one with excellent credit should be able to qualify for?
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Old 05-18-2007, 09:53 AM
 
1,389 posts, read 5,778,463 times
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6.25 you should get a lower rate then 6.25

well my Moderator cut: advertising
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Old 05-18-2007, 11:21 AM
 
Location: Maryland
13 posts, read 44,714 times
Reputation: 12
Damn, I have a Fico score of 796 and I still have to carry PMI. I am getting Md Bond and maybe that has something to do with it. We're making no down payment. Md Bond is kicking in 2% toward closing costs which covers almost all of ours. We're also netting about 4,000 after taxes and taking on a 1375.00 mortgage, with taxes, ins, pmi.
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Old 05-18-2007, 11:28 AM
 
73 posts, read 480,385 times
Reputation: 31
Quote:
Originally Posted by shockerfd View Post
Damn, I have a Fico score of 796 and I still have to carry PMI. I am getting Md Bond and maybe that has something to do with it. We're making no down payment. Md Bond is kicking in 2% toward closing costs which covers almost all of ours. We're also netting about 4,000 after taxes and taking on a 1375.00 mortgage, with taxes, ins, pmi.
That sounds like a great income to mortgage ratio. Mine should skyrocket when my gf graduates in a year, at that point we should be around 110k/yr combined.

It's scary as heck though starting out with just a single income
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