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Richard
Richard, Tax Attorney
Category: Tax
Satisfied Customers: 54340
Experience:  29 years of experience as a tax, real estate, and business attorney.
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Hi. You answered a mortgage question for me before. I have

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Hi. You answered a mortgage question for me before. I have another one and wanted to come back to you. I'm trying to find out if I can qualify for a $348,000 house. The mortgage person I have been working with seems to think so but I think once it gets to the underwriters it's not going to be right.
My GMI is $8666.00
Car Payment is $270
Student loans are $530
Credit Card minimums are $450
I have $22,500 for DP and closing
Owner will give $5,000 towards closing
Welcome! My goal is to do my very best to understand your situation and to provide a full and complete answer for you.

Good evening. The basic guidelines for qualification for determining the highest payment you could qualify for based on credit rating are as follows:

Medium Credit
The lesser of
28.000 % of gross income or
36.000 % of gross income less fixed monthly expenses

Good Credit
The lesser of
36.000 % of gross income or
42.000 % of gross income less fixed monthly expenses

So if you are trying to buy a $348,000 house with a downpayment of $22,500, you will be financing approximately $325,500.

At 5% interest rate with a 20 year amortization, your mortgage payment would be $1744.67/month. If your GMI is $8666 and your credit is good, 36% of your GMI is $3119.76; If your credit is medium, 28% of your GMI is $2426.48. I don't know enough of your fixed monthly expenses, but yours seem minimal so based on what I'm seeing, you should not have a problem qualifying for this mortgage.



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Customer: replied 3 years ago.
So I think you read my question a little wrong. I will be putting down 5% for the down payment. Right now mortgage rates are 4.5%. Since I'm only putting down 5% there will be PMI. So when they are working to qualify that ratio, won't the have to take PMI, real estate tax and Homeowners insurance into consideration since I will be paying that to the bank? Also, the rest of the money I have saved would go towards closing cost. If I don't have enough cash at closing I'm assuming that would just automatically keep me from being able to close.
Thanks for your response. When I plug your information (including the 5% downpayment, PMI Property Tax, and insurance) into my mortgage qualification calculator, at a medium credit you can qualify for a 268,657.88 mortgage and with good credit you can qualify for a $347,103.02 mortgage ($365,371.60 home price). So, as long as you have good credit, you should qualify!
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