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PLEASE HELP with calculating how much I can really afford

I'm trying to figure out how much a lender is going to suggest I can afford for my mortgage and I have a question: I understand that the current calculation is based on a payment of 31% of your total monthly income (assuming your debt expenses don't exceed 5%). With that in mind, if I ran that value through a PMT function with the proper values for term, interest rate, etc, and I came up with a theoretical value of say $100,000, would the down-payment be considered in addition to that value or as a subtraction? In other words, assuming a 10% down payment would the total value of the loan be the $100,000 plus $10,000, making the monthly payment equal to the value calculated in the PMT function, or just the $100,000, making the monthly payment less than the value calculated in the PMT function?I would think the former since, after taking into account the down payment, your monthly payment would be equal to the value afforded you by the PMT function. by CliffordT134 from Ashford, Oregon. Aug 28th 2009 Reply

Nicholas Moss (DirectorsFinancialGroup)
#191 ranked lender in California - 2 contributions

Hi Clifford,That's a great question. We can actually go up to 45% of your total income with all debts included. The down payment is not included in your DTI (Debt to Income). So if you were purchasing a house for $100,000 and put $10,000 down, your DTI would be calculated with $90,000. But you also have to calculate your Taxes, Insurance, and Mortgage Insurance if you're financing more than 80% of the loan, which is your LTV (Loan to Value).Clifford, I can help you with this, and get everything in black and white for you, so you know exactly what you're working with. All I need is to complete an application and have you send in your loan package for an approval.Here at DFG, we have a program with Fannie Mae, that only 13 lenders in the U.S. are able to do. In California, with as little as 3% down with no mortgage insurance or appraisal fees! Please give me a call so I can assist you more with this project and go over the many option we may have for you. Thank you for your time and we appriciate your business.Best Regards, RICK FAISON Real Estate Financing Director 949-200-5800 - Ext. 204 -- Direct714-519-4504 -- Cell949-631-3950 -- Fax949-272-2311 -- E-Fax877-677-5535 - Toll FreeRFaison@DFGBancorp.comwww.DFGBancorp.com2240 University Drive; Ste: #120 Newport Beach, CA 92660People Will Forget What You Said, People Will Forget What You Did. But, People Will Never Forget How You Made Them Feel." "We Appreciate Your Business."This e-mail may contain data that is confidential, proprietary or non-public personal information, as that term is defined in the Gramm-Leach-Bliley Act (collectively, Confidential Information). The Confidential Information is disclosed conditioned upon your agreement that you will treat it confidentially and in accordance with applicable law, ensure that such data isn't used or disclosed except for the limited purpose for which it's being provided and will notify and cooperate with us regarding any requested or unauthorized disclosure or use of any Confidential Information. By accepting and reviewing the Confidential information, you agree to indemnify us against any losses or expenses, including attorney's fees that we may incur as a result of any unauthorized use or disclosure of this data due to your acts or omissions. If a party other than the intended recipient receives this e-mail, he or she is requested to instantly notify us of the erroneous delivery and return to us all data so delivered.

Aug 28th 2009
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