Calculate Your Maximum Mortgage Loan Amount

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Calculating your Maximum Loan Amount

Determining your maximum loan amount requires the estimation of: [1] gross monthly income, [2] total monthly payment obligations, and [3] monthly escrows including real property taxes, hazard insurance and PMI - private mortgage insurance (usually required when LTV - loan to value exceeds 80%). Note: the following steps reflect estimates only. Consult your lender for more detailed information.

Gross Monthly Income

Print for your use!

(insert from Gross Monthly Income Worksheet)

          Annual Income (Primary borrower) $______________

          Annual Income (Co-borrower) $______________

(1). Total Gross Monthly Income
$______________

Monthly Debt Payments

(insert from Monthly Debt Payments - Worksheet) $______________

(2). Total Monthly Debt Payments
$______________

Monthly Escrow Estimate $______________

Note: Monthly escrow payments can only be estimated. Although not exact, your maximum mortgage amount can be estimated by multiplying your total gross income derived above by 2.5 times. This educated guess is used to estimate escrows only.

TGI of $__________ X 2.5 = $ ________*
$______________

*This number is used to estimate the following:

(3). Property Taxes    (mortgage x .000833)
$_________

(4). Hazard Insurance (mortgage x .000208)
$_________

(5). PMI Insurance     (mortgage x .000375)
$_________

To compute your estimated maximum mortgage amount, use the lesser of either the Housing Expense Ratio -or- the Total Debt Ratio as calculated below.

Computing Your "Housing Expense Ratio"

Gross Monthly Income (1) Above $______________

Maximum allowable for PITI & homeowners' association fees $______________

Computing Your "Debt Ratio"

Gross Monthly Income (1) Above $______________

Maximum (debt ceiling) $______________

Less: Total Monthly Debt Payments (2) Above $______________

Maximum allowable for PITI & homeowners' association fees   $______________

Select the lesser of either the Housing Expense Ratio -or- the Debt Ratio then adjust for:

          - Property taxes (3)
$______________

          - Hazard insurance (4) $______________

          - PMI insurance (5) $______________

          - HOA/Condo fee $______________

Maximum Allowable Amount For P & I

Interest Rate Factors - 30 Year Loan

5.5% - .00568                    7.5% - .00699                    9.5% - .00841

6.0% - .00600                    8.0% - .00734                  10.0% - .00878

6.5% - .00632                    8.5% - .00769                  10.5% - .00915

7.0% - .00665                    9.0% - .00805                  11.0% - .00953

Divide the Maximum Allowable Amount For P & I by the factor in the above chart that most closely reflects the current interest rate charged.

(P & I) divided by (factor) = Maximum Loan Amount

__________ / __________ = $ _______________

Selling Or Leasing Real Estate?

© 2002 PropEx - All Rights Reserved
Propex Services, LLC 46 Orchard Street Asheville NC 828-252-3040
Contact Us for Franchise Information or Sales Opportunities.

Determining your maximum loan amount requires the estimation of: [1] gross monthly income, [2] total monthly payment obligations, and [3] monthly escrows including real property taxes, hazard insurance and PMI - private mortgage insurance (usually required when LTV - loan to value exceeds 80%). Note: the following steps reflect estimates only. Consult your lender for more detailed information.

Gross Monthly Income		Print for your use!
(insert from Gross Monthly Income Worksheet)
Annual Income (Primary borrower)		$______________
Annual Income (Co-borrower)		$______________
(1). Total Gross Monthly Income		$______________

Monthly Debt Payments
(insert from Monthly Debt Payments - Worksheet)		$______________
(2). Total Monthly Debt Payments		$______________

Monthly Escrow Estimate		$______________
Note: Monthly escrow payments can only be estimated. Although not exact, your maximum mortgage amount can be estimated by multiplying your total gross income derived above by 2.5 times. This educated guess is used to estimate escrows only.
TGI of $__________ X 2.5 = $ ________*		$______________
*This number is used to estimate the following:
(3). Property Taxes (mortgage x .000833)	$_________
*(4).* Hazard Insurance (mortgage x .000208)	$_________
*(5).* PMI Insurance (mortgage x .000375)	$_________
To compute your estimated maximum mortgage amount, use the lesser of either the Housing Expense Ratio -or- the Total Debt Ratio as calculated below.

Computing Your "Housing Expense Ratio"
Gross Monthly Income (1) Above		$______________
Maximum allowable for PITI & homeowners' association fees		$______________

Computing Your "Debt Ratio"
Gross Monthly Income (1) Above		$______________
Maximum (debt ceiling)		$______________
Less: Total Monthly Debt Payments (2) Above		$______________
Maximum allowable for PITI & homeowners' association fees		$______________
Select the lesser of either the Housing Expense Ratio -or- the Debt Ratio then adjust for:
- Property taxes (3)		$______________
- Hazard insurance (4)		$______________
- PMI insurance (5)		$______________
- HOA/Condo fee		$______________

Maximum Allowable Amount For P & I
Interest Rate Factors - 30 Year Loan
5.5% - .00568 7.5% - .00699 9.5% - .00841
6.0% - .00600 8.0% - .00734 10.0% - .00878
6.5% - .00632 8.5% - .00769 10.5% - .00915
7.0% - .00665 9.0% - .00805 11.0% - .00953

Divide the Maximum Allowable Amount For P & I by the factor in the above chart that most closely reflects the current interest rate charged.

(P & I) divided by (factor) = Maximum Loan Amount
__________ / __________ = $ _______________

Selling Or Leasing Real Estate?

© 2002 PropEx - All Rights Reserved Propex Services, LLC 46 Orchard Street Asheville NC 828-252-3040 Contact Us for Franchise Information or Sales Opportunities.