80 15 5 mortgage calculator

80 15 5 mortgage calculator
If you are a potential homeowner in the market for a mortgage, to know how much you can afford it, you'll be out of financial hot water. Planning your home purchase will help you prevent that, if the application for a mortgage loan. Here are some tips to help you determine exactly how much mortgage you can afford.

Understanding Your Debt-to-income ratio

Mortgage companies use your debt-to-income ratio to determine how much you can afford. This ratio expresses your monthly income and your debt as a percentage. Mortgage lenders typically do not want your mortgage payments to more than 33% of your monthly income amount. If you have other bills will be included in the equation your monthly obligation should not exceed 38% of your monthly income.

How do you calculate your debt-to-income ratio

When calculating your debt-to-income ratio, it is important that only the income you can document. This means you must pay stubs and W-2s to document your income. The easiest way to calculate your debt-income ratio is, by the amount on the W-2 and divide by twelve. Multiply this amount by, 38, and you have the maximum amount of your mortgage payments and bills can be.

Using a Mortgage Calculator Calculate Your Payment

You can calculate what your mortgage payment is based on the interest rate and purchase price of your home with a simple mortgage calculator. If you determine how much of a mortgage payment you can afford it, you can easily determine whether a house is in your price range.
You can learn more about your mortgage options, including costly mistakes to avoid by registering for a free mortgage tutorial.

To get your free mortgage tutorial visit RefiAdvisor.com with the link below.

Louie Latour specializes in homeowners how to avoid costly mortgage mistakes and predatory lenders. For a free copy of "Mortgage Refinancing - What You Need To Know," which teaches strategies to find the best mortgage and save thousands of dollars in the process, visit Refiadvisor.com.