ASSUMPTIONS: |
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30-year mortgage |
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Closing costs (fees for property, survey, credit report, title search, title insurance, attorney, interest advance, loan origination) = $5,000 |
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Funds available for closing costs and down payment = $25,000 |
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Interest rate on mortgage = 6 ½ % per year |
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Estimated real estate taxes = $200 per month |
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Estimated homeowner’s insurance = $20 month |
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Example Numbers |
Your Numbers |
1. Monthly income, gross (before taxes or deductions)........$4,000 |
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2. Apply PITI ratio (0.28 x amount on line 1) to determine borrower’s payment capacity: 0.28 x $4,000 = $1,120 |
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3. Determine mortgage payment (principal and interest) by subtracting taxes and insurance ... |
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