How Much of a House Payment Will I Qualify For?

Many loan programs may allow you to qualify for home financing with a higher debt ratio that what is calculated from this sheet.  Other factors such as credit, down payment, reserves (money in the bank) and other factors may also affect how much of a mortgage you will qualify for.

Print this page for ease of use!

Follow each following step to see approximately how much of a house payment you will qualify for.

A - What is your Monthly Gross Income?                                                    $_________________

            Income BEFORE taxes

                        Salaried – Divide yearly salary by 12.

Hourly – hourly pay <times> average hours worked per week <times> 52 <divided by> 12.

Self Employed – Schedule C net income. Add back in Depreciation and interest, divide by 12.

B - What are your monthly debt payments?                                                 $_________________

Include consumer debt minimum payments such as; car, credit cards, student loans, gas cards, Store charge cards, etc.

DO NOT include; house or apartment rent, utilities, cell phone, insurances

C – Multiply your monthly Income (“A” above) by .41%                           $_________________

This is what your total payments can be including house and all debts. For example; if you make $3,000 per month this is what you would do: 3,000 x .41 =  1,230

D – Subtract monthly debts (B) from total payments (C)                             $_________________

            This is what you will qualify for a total house payment

E – To calculate house payments click here. There is a calculator on the front (home) page.  However you can use the basic calculations below:

Basic calculations:

            For every $10,000 in house payment your payment will about:

                        5% interest rate = $54

5.5% interest rate = $57

6% interest rate = $60

                        6.5% interest rate = $63

                        7% interest rate = $67

                        7.5% interest rate = $70

                        8% interest rate = $73

It won’t be exact as I have rounded to the nearest dollar, but it will get you close.

For example: A $200,000 dollar loan at 6% interest would be:

            200,000 New loan amount, divided by 10,000 (factor used above) = 20

            20 multiplied by $60 = $1,200 (house payment)

* Important Note:  This calculation is for Principal and Interest only.  Taxes and insurance will also need to be considered.  In many cases, Mortgage Insurance may also need to be added.

To find out exactly how much you can qualify for and to receive a real loan approval, call:

Ron Pippin

The Loan Doctor

801-628-7667 Mobile

801-409-5191 Office

Ron@HelpMeWithAMortgage.com