Real Estate Practice : Lesson 535
Remember to help your clients figure in insurances , utilities, possible repairs /replacements etc. I just had some renters contact me who figured they coud make monthly house payments with what they paid out in rent. If only it was that easy!
#535
A man is applying for aconventional loan with an LTV of 90%.
He has a monthly income of 3000 dollars a month.
His total monthly recurring debt obligations equal 500 dollars.
What is the maximum monthly mortgage payment that this buyer will qualify for ?
A. $580
Here's how it works.
3000 total monthly income
*
0.36 or 36% of monthly income for mortgage
=
1080 total for mortgage
-
500 in additional recurring debt subtracted from the maximum allowable for the mortgage
=
580 dollars total available for mortgage payment36% is the standard for lending if there are other monthly debt obligations
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