How does one determine how much of a mortgage they can qualify for?
by Mortgage Rates on Friday, October 15th, 2010 | 2 Comments
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Check with mortgage companies to find out what their lowest rate is. When you find one that has reasonable rates, have them run a credit check and find out how much you qualify for. Then ask for a prequalification letter. Then you can start looking. I suggest that you get a realtor because they will handle inspections, price and inclusive items negotiations, contract requirements, and closing. You will be required to make a down payment of at least 20% plus the cost of the closing, insurance etc…
The middle class are suggested to keep their housing expense to 30% of their gross income. For you that is $10,000.
$1,100,000 Purchase Price
$220,000 Down Payment
$880,000 Loan Amount
$6,381 Payment @ 7.875%
$1,000 Taxes
$250 Hazard Insurance
$7,631 Total Monthly Housing Payment
You seem to be well within your price range.