Mortgage Rules Of Thumb
MORTGAGE RULES OF THUMB Mortgage Affordability MORTGAGE S 2. 2.5 times the homebuyer's gross income. FRONT END RATIO Principal Represents the percentage of your annual gross income that's required to cover your Interest Таxes Insurance 24 mortgage payment. PITI should not exceed 28 of your annual gross income. Federal Housing Administration Guidelines : PITI < 31% Represents the percentage of your ANNUAL GROSS INCOME required to cover all of your debt. BACK-END RATIO Debt-To-Income Ratio (DTI) DTI should not exceed 36 % of annual gross income. Federal Housing Administration DOWN PAYMENT Guidelines DTI < 43% 20 % of a home's price. When to Stretch HOMEOWNERS CAN SPEND a little more on their mortgage when they: Don't have a lot of other MONTHLY EXPENSES Don't plan to HAVE CHILDREN Are extremely certain that their income will rise SUBSTANTIALLY in the coming years. Don't have to invest in their own retirements because they have an EMPLOYER-PROVIDED PENSION. Most Affordable Mortgage Combinations 43% Fronf End Rolio 20% Down Payment Ma Home hice 4.4 X Gross income 20% 123456 1990 Down Payment 31% Front End Rotio Max Home Price 5 X Gross Income 5% 31% Down Payment Front End Ratio Max Home Price 4.4 X 5% Down Payment Max Home Price -3.1X 43% Gross Income Front End Ratio Sources: http://money.cnn.com/magazines/moneymag/moneymog_archive/2006/08/01/8382158/index.htm http://mortgogerates.inmyarea.com/home-mortgage/mortgage-rules-of-thumb http://www.ehow.com/info_7748790_much-mortgage-monthly-rule-thumb.html http://www.mymoneyblog.com/4-different-rules-of-thumb-for-how-much-house-yoU-can-afford.html http://www.thetruthaboutmortgage.com/the-refinance-rule-of-thumb/ Presented by Prepared by moneytips
Mortgage Rules Of Thumb
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