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Mortgage Loan Qualifying Standards

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The mortgage loan industry is a huge and complex industry in today’s market with an incredible number of options available. Your Berkshire Hathaway HomeServices REALTOR® can help you work your way through the maze to obtain the kind of mortgage loan that would best suit your needs. While each loan has its own standards for qualifying, you can get a very good idea of how large a loan you will qualify for by completing the form below. Government loans typically allow a bit higher loan amount than this form will indicate.

Column A Column B
Your GROSS monthly income

X .28 X .36
Sub – Totals

(A)  

(B)

*  Bills above in item B: Defined as any bill that you pay monthly such as car/truck payments, personal loan, student loan, loan payments you are responsible for even as a co-signer, alimony or child support, credit card payments, etc. Regular payments that are not to be included would include your current mortgage payments or current utilities or monthly payments associated with your current residence. Subtract your monthly bills*
from column B
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-
-
-
-
-
-
-
Monthly Bills Subtotal:
(C)  
Insert the Lower number of either (A) or (C)
(D)  
Subtract an estimated amount for monthly taxes and homeowners insurance
(E)  
This total is the amount you can apply toward your monthly mortgage.
(F)  
Divide (F) by the Factor for the interest rate as shown below.

 
Interest Rate Factor
6.0% .00600
6.5% .00633
7.0% .00666
7.5% .00700
8.0% .00734
8.5% .00769
9.0% .00805
9.5% .00841
10.0% .00878
(F) divided by Factor = The is the amount you should qualify to borrow.

(G) 
Add the amount you plan to invest in the home.  (Down Payment)

(H) 
(G) + (H) = The general price range of home you should consider.

Also, talk with your Berkshire Hathaway HomeServices agent about closing costs.  You’ll find they vary greatly from lender to lender and are also dependant on the type of loan you seek.  Almost everyone needs professional guidance to obtain the best terms.  Remember, the best "rate" is not always the best loan for you.  Points, closing costs and lender’s commissions can make a substantial difference in the price you pay.