how to calculate how much you can pay for a house?
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The 28/36 percent rule is the tried-and-true home affordability rule that establishes a baseline for what you can afford to pay every month. Example: To calculate how much 28 percent of your income is simply multiply 28 by your monthly income. If your monthly income is $6,000, then multiply that by 28.
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To calculate the maximum mortgage payment you can afford under the back-end ratio, take your annual income, divide it by 12, and then multiply by 0.36 (or whatever your lender's back-end ratio is). Subtract your monthly debts from this amount to determine your maximum monthly mortgage payment under the back-end ratio.
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There are a few things you should have on hand to calculate your take-home pay: The amount of your gross pay. If you earn a fixed salary, this is easy to figure out. Just divide the annual amount by the number of periods each year.
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['Check the Market.', 'Find Out How Much the Seller Paid.', 'Examine Comparable Sales.', 'Analyze List Price to Sales Price Ratios.', 'Check Square-Foot Cost Averages.', "Ask for the Home's History and Days on Market."]
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If you want to do the monthly mortgage payment calculation by hand, you'll need the monthly interest rate — just divide the annual interest rate by 12 (the number of months in a year). For example, if the annual interest rate is 4%, the monthly interest rate would be 0.33% (0.04/12 = 0.0033).
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['M = the total monthly mortgage payment.', 'P = the principal loan amount.', "r = your monthly interest rate. Lenders provide you an annual rate so you'll need to divide that figure by 12 (the number of months in a year) to get the monthly rate. ... ", "n = number of payments over the loan's lifetime."]
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Your new UFMIP amount. This is calculated by multiplying your base loan amount by 1.75% (all FHA mortgages charge this amount).
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This is a simple calculation -- just divide your loan amount by your home's value, to get a figure that should be in decimal points. If, for example, your loan is $200,000 and your home is appraised at $250,000, your LTV ratio is 0.8, or 80%.
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Take your gross monthly income (that's income before taxes are taken out) and multiply it by 45% – or . 45 on your calculator. Then subtract your minimum monthly payments on any of your consumer debts. What's left is the amount you generally can “afford” for a mortgage payment.
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You can figure out how much equity you have in your home by subtracting the amount you owe on all loans secured by your house from its appraised value. For example, homeowner Caroline owes $140,000 on a mortgage for her home, which was recently appraised at $400,000. Her home equity is $260,000.
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['Step 1 - Your desired living situation. Are you looking to buy or to rent? Buy. ... ', 'Step 2 - Your financial information. Annual household income (before taxes)* Down Payment* Mortgage interest rate* ... ', 'Step 3 - Your monthly expenses. On average, how much money do you spend each month (excluding housing expenses)? $0.']
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Chartered surveyors can give you an accurate house valuation, usually at a cost of around between £250 and £600. This is a service you would usually get when buying a home. Mortgage lenders will also provide their own house valuation, but again, this is something that will be done during the home buying process.
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It's calculated as a percentage of the mortgage and is based on the size of your down payment. Your lender will likely pass this cost on to you. You can pay it in a lump sum or add it to your mortgage and include it in your payments.
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How much do appraisals cost? A typical, single-family home appraisal will range from $300 to $450 and can vary depending on a number of factors, including the size of the home, the value of the property, condition of the property and the level of detail involved in the appraisal.
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To calculate your front-end ratio, divide your annual pre-tax income by 12, and then multiply this amount by 0.28. As an example, if your salary is $60,000 per year, dividing by 12 gives a gross monthly income of $5,000, and multiplying this by 0.28 gives a maximum mortgage payment of $1,400 per month.
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The calculation formula to use is: “Buy to let mortgage price” x 5.5% = “annual interest rate” / 12 months = Your monthly interest repayments (ICR) Multiply the ICR coverage by 145% for the total you can borrow.
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They determine this amount by dividing the appraised value of the house by the amount remaining on your mortgage, and the amount you'd like extended. For example, if your home is worth $300,000 and you owe $90,000 on it, divide the balance by the appraised value: 90,000/300,000= . 3, or a 30% LTV ratio.