How does house payments in Seattle and buying a house coordinate? What we are really asking is "how expensive of a house can I buy?" Lenders use two types of ratios to determine your maximum purchase price. There is the front end ratio and the back end ratio. The front end ratio is the percentage of your monthly house payment to your total income and your back end ratio is the percentage of your house payment plus consumer debt to your monthly income. Questions about qualifying for a loan click here.
Qualifying for a mortgage is a balance between how much your mortgage payment is and how much you make.
Your front end ratio consists of:
Monthly principal and interest, taxes, insurance, mortgage insurance, and association dues if any.
Your back end ratio consists of:
All of the above plus credit cards, child support and alimony, car payments, and installment debts.
In general the ratios should be close to 36% and 45% or better.
These ratios are the maximum you can qualify for and you need to consider your personal budget rather than purchasing the maximum you can. I usually tell prospective customers that they will qualify for more house than they want to buy.
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Joe LaVallie
The Integrity Team
Mortgage Banker
HomeStreet Bank
22001 66th Ave W
Mountlake Terrace WA 98043
NMLS ID#111363
joe.lavallie@homestreet.com
425-678-7604 Direct
1-800-761-7788 ext 7604
206-743-4722 Cell
Fax 206-512-1911
To Apply Online http://www.homestreet.com/jlavallie
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