Ratio Secrets - Revealed
A Marcus Mortgage wants you to know the RATIO. It really helps. These ratio secrets are not really secrets but most people find out about them too late in the process. You want to know them up front.
O. K. Here is the Ratio Rules that are often times stretched to make things work. These ratios are subject to change with new lending guidelines expected.
There is a Top ratio that equals your total allowable housing payment which includes principle, interest, taxes, insurance and Home Owners association dues.
For FHA it is 29% of your monthly income but with compensating factors they will allow up to 32%
For Conventional the top ratio is 28%.
Now, we have the Bottom ratio. This is all of your debt including the new mortgage and combining it all together. For FHA it is 42% of your monthly income but with compensating factors they will allow much higher.
For Conventional the bottom ratio is 38%.
An old rule of thumb states that if you add seven or eight dollars for every thousand of your purchase price you should be close to your total payment. Principal interest taxes and insurance all included. Do not forget HOA fees for purposes of Ratios calculations.
Here is an example: 300,000.00 at $7.00 per thousand would equal 2,100 per month. This comes close to the full payment.
This of course is not exact but is a good way to calculate in your head when you are looking at property.
So many things can alter this as well. If you want a more specific number from these ratio secrets: We need a house address, taxes, an insuance guesstimate, and the homeowner's association fees. Call us at (480) 899-4737 for a specific scenario. There is no charge or obligation. We just want the opportunity to serve. It takes less than 10 minutes.
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