a. Monthly income (annual income divided by 12) $5,250.00 b. Times 0.28: Percentage of PITI (Principal, interest, taxes, and insurance) to your monthly gross income that lenders will lend in the form of a mortgage loan (multiply line a by 0.28) x 0.28 = $1,470.00 c. Less: Estimated monthly real estate tax and insurance payments-$22.92 d. Equals: Your maximum monthly mortgage payment using the 28% = $1,447.08 To Determine the Maximum Mortgage Loan Level Using the Maximum Monthly Mortgage Payments as Determined Using the PITI Ratio (line d): Step 1: Monthly mortgage payment for a $10,000 mortgage with a ____ year maturity and a ____% interest rate (using Table 8.1) = $80.47 Step 2: Maximum mortgage level = maximum monthly mortgage payment (line d) divided by the monthly mortgage payment on a $10,000, ____%, ____year mortgage (step 1 above) times $10,000 = (line d/step = $179,828.92 e. Monthly income (annual income divided by 12) $5,250.00 f. Times 0.36: Percentage of PITI + current monthly fixed payments to your
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