ASSUMPTIONS:

30-year mortgage

Closing costs (fees for property, survey, credit report, title search, title insurance, attorney, interest advance, loan origination) = $5,000

Funds available for closing costs and down payment = $25,000

Interest rate on mortgage = 6 ½ % per year

Estimated real estate taxes = $200 per month

Estimated homeowner’s insurance = $20 month

Example Numbers

Your Numbers

1. Monthly income, gross (before taxes or deductions)........$4,000

                           

2. Apply PITI ratio (0.28 x amount on line 1) to determine borrower’s payment capacity: 0.28 x $4,000 = $1,120

                           

3. Determine mortgage payment (principal and interest) by subtracting taxes and insurance ...

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