When calculating affordability or as we call it qualifying for a mortgage, there are many factors in determining how much you will qualify for. As a general rule, you would need at least 5% down, although if you have excellent credit, you could qualify for as little as zero down. That’s right, zero down payment still exists. You would qualify based on 32% of gross income for housing cost, which would include heating, taxes, electric etc. Note your total debt service ratio (all your debts combined) cannot exceed 42%. So here is an example. Gross Income 80,000 Amount available for housing 25600 or 2133 monthly. Less Taxes and Utilities example 700 Leaves 1433/month for Mortgage Servicing. 1433 per month would purchase roughly 300,000 dollar home assuming a 3.5% interest rate and a 5% down payment. If you would like to know how much you qualify for contact Eric Meredith @ 902.830.5139 or email [email protected] or fill out the contact form below.
Note: Tax refers to Property Taxes and PMI refers to Private Mortgage Insurance (normally required by lenders when a deposit of 20% or less is made on the purchase)
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