Affordability Worksheet
In addition to having the cash for the down payment, closing costs and good credit history, the mortgage lender will want your house payment and other debts to conform to accepted qualifying ratios. While 28%/36% are the most common, some loan ratios differ.
Column A Column B
Annual income before taxes (gross): $_____________
Divide by number of months: 12
Divide by number of months: 12
Monthly gross income: =_____________ =__________
Many lenders will not allow you to spend more than 28% of your x .28
Monthly gross income on housing expense: (column B)
Maximum monthly housing expense allowance (column B) =__________
Many lenders allow 36% of monthly gross income for long-term debt: x .36
Long-term monthly expense allowance: =_____________
Figure out your monthly long-term obligations below, and subtract it from the allowance:
- child support $_____________
- auto loan + _____________
- credit cards + _____________
- association fees + _____________
- other + _____________
- total long-term obligations: = _____________
Monthly housing expense allowance: = _____________
Record the smaller figure in Column A or B: $_____________
Estimating about 20% for taxes and insurance, leaving
80% for payment of mortgage (principal and interest): x .80
Allowable monthly principle and interest expense: + _____________
Divide by Monthly Payment Per Thousand Dollars from table (below) ___________ = _____________
Multiply by 1000: x 1000
Estimated Affordable Mortgage Amount $_____________
| Rate | 15 yr. | 30 yr. | Rate | 15 yr. | 30 yr. | Rate | 15 yr. | 30 yr. | Rate | 15 yr. | 30 yr. |
| 6.0% | 8.44 | 6.00 | 7.75% | 9.41 | 7.16 | 9.5% | 10.44 | 8.41 | 11.25% | 11.53 | 9.72 |
| 6.25% | 8.58 | 6.16 | 8.0% | 9.56 | 7.34 | 9.75% | 10.60 | 8.60 | 11.5% | 11.69 | 9.91 |
| 6.5% | 8.72 | 6.33 | 8.25% | 9.70 | 7.51 | 10.0% | 10.75 | 8.78 | 11.75% | 11.85 | 10.10 |
| 6.75% | 8.85 | 6.49 | 8.5% | 9.85 | 7.69 | 10.25% | 10.91 | 8.97 | 12.0% | 12.01 | 10.29 |
| 7.0% | 8.99 | 6.65 | 8.75% | 9.99 | 7.87 | 10.5% | 11.06 | 9.15 | 12.25% | 12.17 | 10.48 |
| 7.25% | 9.13 | 6.82 | 9.0% | 10.14 | 8.05 | 10.75% | 11.22 | 9.34 | 12.5% | 12.33 | 10.68 |
