a. Monthly income (annual income divided by 12)$5,250.00 b. Times 0.28: Percentage of PITI (Principal, interest, taxes, and insurance) to yourmonthly 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-$275.00 d. Equals: Your maximum monthly mortgage payment using the 28%=$1,195.00 To Determine the Maximum Mortgage Loan Level Using the Maximum MonthlyMortgage Payments as Determined Using the PITI Ratio (line d):Step 1: Monthly mortgage payment for a $10,000 mortgage with a ____ yearmaturity and a ____% interest rate (using Table 8.1)=$73.38 Step 2: Maximum mortgage level = maximum monthly mortgage payment (line d)divided by the monthly mortgage payment on a $10,000, ____%, ____yearmortgage (step 1 above) times $10,000 = (line d/step=$162,850.91 e. Monthly income (annual income divided by 12)$5,250.00 f. Times 0.36: Percentage of PITI + current monthly fixed payments to yourmonthly gross income that lenders will lend in the form of a mortgage loan(multiply line a by 0.36)x 0.36=$1,890.00 g. Less: Current nonmortgage debt payments on debt that will take over
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