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Annual salary: $ 40,000 ($ 3,333/month)

monthly debt: $ 165 (4.95% debt to income)

credit scores 671-725

$ 25,000 in savings (want to put 10% down and pay closing costs)

never any negative credit, but minimal history. credit accounts only open for about 2 years, never a late payment

I have heard all the guidelines of 2.5 times income and things like that, but i also know that banks will generally lend you alot more than that….so I want to know what you think is the max number that the bank will approve me for???

5 Thoughts on How much house might I be approved for???
  1. Reply
    paul y
    February 16, 2014 at 2:04 pm

    You always spend less then you should for your house.
    The market is great for any buyer so buy more house then you need. I wish I would have.
    $ 150,000 is the right kind for your but I would sacrfice and go a up..south easter Michigan area has a lot of real estate up for sale.

    Location is the key to the real estate game

  2. Reply
    Brad S
    February 16, 2014 at 2:13 pm

    There are free mortgage calculators out there on the web that can do this. You’ll be able to qualify for plenty more than you think because mortgage brokers are shady and want your business and shop for loans for you at all sorts of banks I’d say you’ll be able to get a loan for 120k-140k (4x your salary plus savings).

    Also this is getting to be a real buyers market where I live. If it’s getting to be a buyers market where you are you should be able to get the seller to pay closing costs.

  3. Reply
    February 16, 2014 at 2:23 pm

    I’m guessing $ 140,000… but, go to… they are considered the McDonalds of Home Mortages…. they will give you a free quote,,,, they will also let you konw right away how much you quilify, pending credit checks.

  4. Reply
    February 16, 2014 at 2:46 pm

    Mortgage companies take into consideration a number of things in determining the amount they will loan you on a mortgage.
    one is your TDS or total debt service. You will need to list the amounts that are spent monthly on all expenses. I’m sure your bills are more than $ 165.00 pm. you must include rent, electricity, food, medical, gas, credit cards, cable TV, entertainment, pocket money etc. the total of all these debts house payments included should not exceed 40% of your gross monthly income.
    House rent/mortgage + taxes + utilities/living + other debts divided by gross monthly income X 100 = TDS ratio
    they also use GDS Gross Debt Service ratio. this determines the amount required each month for housing.
    Monthly Mortgage Payment + Property taxes + heating
    divided by gross monthly income X 100 = GDS ratio. This should not exceed 32% of your gross monthly income.
    These are the guidelines for mortgage loans.
    So decide how much you can afford to pay each month for your mortgage. .
    On a mortgage amortized over 25 years using 7% interest the payments would be approx $ 72.00 per $ 10.000. loaned. You can use those figures to decide on how much you can qualify for. and don’t forget to add your down payment that should give you a general idea of what price range. Also consider a reduced purchase price. The more you put as a down payment, the more they will give you for a mortgage.
    PS if you are married or the mortgage will be a joint ownership. You may include 50% of your spouses gross income towards qualifying for the mortgage.

  5. Reply
    February 16, 2014 at 3:23 pm

    This will depend on the type of loan you choose.

    Try calling Wells Fargo Bank and get a free estimate. Then shop around with a local mortgage broker.

    You can also use a loan amortization website to do this. Try the link provided by Wells Fargo Bank. Note, your total payments including property taxes and (homeowners) insurance shouldn’t go above 45% of your gross income.

    If you call Wells Fargo, be sure to ask about their new 30 year loan with interest only payments for 15 years. This may or may not be a good loan for you.

    Best Wishes!
    Your Real Estate Professionals

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