| |
A
|
B
|
| Annual
income before taxes (gross) |
|
|
| Divide
by number of months |
divided
by 12
|
|
| |
=
|
|
| Many
lenders will not let you spend more than 28% of your
gross monthly income on housing expense. |
|
x
.28
|
| Maximum
monthly housing expense allowance (column B) |
=
|
|
| Many
lenders allow 36% of gross monthly income for long-term debt |
x
.36 =
|
|
| Figure
your monthly long term obligations below, and subtract from
the allowance. |
|
|
child
support
|
|
|
|
auto
loan
|
|
|
|
credit
cards
|
|
|
|
association
fees
|
|
|
|
other
|
|
|
|
total
|
= |
|
|
| Monthly
housing expense allowance |
= |
|
|
| Record
the smaller figure in Column A or B |
|
|
| Estimating
about 20% for taxes and insurance, leaving 80% for payment
of mortgage(principal & interest) |
x.80
|
|
| Allowable
montly principal & interest expense |
|
|
| Divide
by monthly payment per thousand dollars from table below |
|
|
|
=
|
|
|
| Multiply
by 1000 |
x
1000
|
|
| Estimated
affordable Mortgage Amount |
|
|
|
|
|
|
|
|
