Why prequalify first? The reason is simple: to determine what price range you are comfortable with and capable of affording before searching for your perfect home. The prequalifying process includes meeting with a mortgage lender or broker, having that mortgage professional analyze your income, debts, assets, credit rating and available cash to determine the potential purchase price of a home.
Here is how to determine an estimate of how much of a mortgage you’re qualified to obtain:
1. Determine your gross monthly income. _________
2. Your gross monthly income times 28%(.28) = your
allowable monthly payment _________
3. Monthly installment payments; cars, credit cards, etc. _________
(Made timely?)
4. Gross monthly income (line 1) times 8% (.08) _________
5. Line 3 minus line 4, but not less than 0 _________
6. Monthly real estate taxes (1/12 annual tax
estimate $50 if unknown) _________
7. Monthly homeowners insurance (1/12 annual premium
estimate $50 if unknown) _________
8. Amount of monthly payment available for principal &
interest (PI) (line 2 minus lines 5,6,& 7) _________
9. Mortgage amount (P) (line 8 times table factor) _________
10. Amount of initial investment (down payment) _________
11. Potential purchase price (lines 9 + 10) _________
Multiply monthly payment available (PI) by table figure to get mortgage amount (P).
|
Int
|
|
|
15 year
|
|
|
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30 year
|
|
6.00%
|
|
|
113.5
|
|
|
|
166.79
|
|
6.50%
|
|
|
114.8
|
|
|
|
158.21
|
|
7.00%
|
|
|
111.26
|
|
|
|
150.31
|
|
7.50%
|
|
|
107.87
|
|
|
|
143.02
|
|
8.00%
|
|
|
104.64
|
|
|
|
136.28
|
|
8.25%
|
|
|
103.08
|
|
|
|
133.11
|
|
8.50%
|
|
|
101.55
|
|
|
|
130.05
|
|
8.75%
|
|
|
100.06
|
|
|
|
127.11
|
|
9.00%
|
|
|
98.59
|
|
|
|
124.28
|
This prequalification form courtesy of SDS Mortgage 970 945-0172.