• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Sonoma County Mortgages

Contact Us About Mortgage Financing

All financing provided by New American Funding

(707) 217-4000 | Prequalify Now

Search Sonoma County Mortgages

  • Home
  • Purchase
    • How Much Down Payment To Buy A Home?
    • How Much Income You Need To Buy A Home
    • How Much Should I Save For Buying A Home?
      • How Rates Affect Payment
    • No PMI Mortgages
    • FHA Loans
    • Sonoma County Disaster Loans
    • Jumbo Loans
  • Refinance
    • Mortgage Rates
    • Does It Make Sense To Refinance?
      • Get Your Refi Paperwork In Order
    • How To Pay Off Your Loan Faster
    • How To Remove PMI
    • How Lenders Price & Quote Loans
  • Loan Programs
  • Payment Calculator
    • Mortgage Affordability Calculator
  • Blog
  • Videos
  • About SCM
  • About Scott Sheldon

Primary Sidebar

Sonoma County Mortgages is a part of New American Funding

New American Funding - NMLS #6606

Get Your Latest Rate Quote Now!

Quick Calculation For Determining House Payment

February 18, 2013 by Scott Sheldon

Share on Facebook Share on Twitter Share on Pinterest Share on LinkedIn Share on Email
How Much Will It Cost

As consumer taking out a mortgage loan, computing a house payment can be a time-consuming process running calculations, let alone qualifying these days. What consumers don’t oftentimes realize, there’s a much easier way to calculate a house payment.

Some terms to become familiar with:

House Payment or rather PITI

Principal-represents principal balance being paid down over the term of an amortizing mortgage such as a 30 year fixed home loan

Interest-refers to the amount of the payment that goes towards interest each month during the loan repayment e.g. 360 months, 180 months, etc.

Taxes-refers to the monthly property taxes built into the house payment, oftentimes deemed an impound or escrow account

Insurance-represents the monthly amount going towards hazard/fire insurance collected by the lender each month

DTI Debt To Income Ratio

Debt To Income-is the amount of total monthly liabilities expressed as a percentage for qualifying against monthly income. (PITI + monthly liabilities) ÷ monthly income.

Easy Formula For Determining House Payment

For every $100,000 borrowed it is approximately $725 per month PITI

Depictions reflect change in house payment..

  • Borrowing $100,000-expect house payment to be approximately $725/month
  • Borrowing $200,000-expect house payment to be approximately $1,450/month
  • Borrowing $300,000-expect house payment to be approximately $2,175/month
  • Borrowing $400,000-expect house payment to be approximately $2,900/month
  • Borrowing $500,000-expect house payment to be approximately $3,625/month

As informed borrower, consider most lenders will want the payment to be no more than 45% of the total monthly liabilities including a proposed housing payment. (*Note this does vary from loan program to loan program, but the consensus is up to a 45% debt ratio)

Let’s say a consumer wants to buy a home for $350,000.

As we know, a house for $350,000 using half of the $725 per month in PITI generates a monthly payment of approximately $2,537.50 per month. Assuming no other monthly payment liabilities, using a 45% debt to income ratio, a consumer would $5638 per month in income to offset the house payment in ordo qualify for the mortgage.

How monthly liabilities affect the numbers in determining house payment eligibility

Using the above example, let’s say the month liabilities consist of ; a lease payment for $300 per month and another$80 per month in credit cards. Assuming our example income $5,638 per month, to purchase that $350,000 home, the monthly income would have to be $6,482 per month adjusting for monthly liabilities (determined house payment + liabilities) ÷monthly income. Alternatively, reducing the purchase price to $300,000 is another solution,  in making  the numbers pencil.

*Mortgage Tip: 45% of the total monthly income less monthly liabilities is the maximum house payment a consumer can qualify at, then simply decipher what the monthly payment is relative to amount sought based upon using $725 per month for every $100,000.

Other factors to aware of in qualifying for mortgage loan financing…

→Monthly mortgage insurance changes house payment, less than 20% equity (equity same thing as down payment) will typically contain monthly mortgage insurance paid by the borrower for the benefit of the lender

→Down payment/equity positively influences borrowing power

→Meeting lender’s minimum credit score required for financing, 620 is quite common

→Assets/reserves generally, you’ll need at least two months of PITI saved in the bank to meet lender’s reserve guidelines.

 

If you’re in the market for a mortgage  or trying to determine how much house payment you can take on, we’d be happy to run the math for you to show how the numbers pencil given your qualifying ability. You can start today by getting qualified online with us for free, no obligation. We can walk you through your ability to qualify for your ideal house payment.

Related Mortgage Advice from Scott Sheldon

  • Mortgage Insurance: Consumer Tips On PMI & Advoidance

    Mortgage Insurance is like the plague to a monthly mortgage payment. It makes the cost…

  • Home Buying Sonoma County: Paying Off Debt To Qualify

    If you are in the process of home buying or even refinancing a Sonoma County…

  • How To Buy A Home By Refinancing Another

    An important home buying hurdle you'll need to over is the relationship between the proposed…

  • How Much Income Do You Need To Buy A House?

    Home Loans are made against your ability to repay. While the mortgage loan is secured…

Filed Under: Loan Qualifying, Mortgage Tips & Advice Tagged With: home buying, how to calculate house payment, how to qualify yourself for a mortgage, mortgage payment, preapproval to buy a home, qualifying for a mortgage, sonoma county refinancing

Get Sonoma County Mortgages News and Updates in Your Inbox

Footer

SCM on Facebook

SonomaCountyMortgages.com

Connect on Facebook

SCM On Instagram

Follow Sonoma County Mortgages on Instagram

Follow on Instagram

SCM on Zillow

Zillow Reviews for Scott Sheldon, New American Funding

See Reviews on Zillow

Location & Contact

Sonoma County Mortgages and New American Funding are an Equal Opportunity Housing Lender

Scott Sheldon, Senior Loan Officer
NMLS ID# 287389
2455 Bennett Valley Road C107
Santa Rosa, CA 95405
1-707-217-4000
View SCM Map | Email Us!

Map of Sonoma County Mortgages New American Financing Office

View Map on Google

Copyright 2010–2023 SonomaCountyMortgages.com · About Us · Sonoma County Loans · Privacy Policy · Terms Of Use · Legal · Site Map

NMLS Consumer Access © New American Funding. All rights Reserved. NMLS ID#6606.
Corporate Office 14511 Myford Road, Suite 100, Tustin, CA 92780. We at New American Funding take great pride in our customer service and make it our number one priority. We encourage you to contact us for complaint resolution or any post-closing questions you may have regarding the servicing of your loan. We strive to have your experience with New American Funding a stellar one. In the rare case that our service did not meet your expectations, please call our customer care hotline at 1-800- 450-2010, ext. 7100 or you may contact us by email customerservice@nafinc.com. Please leave a detailed message and we will follow up with you no later than the end of the next business day. If you are using a screen reader or other auxiliary aid and are having problems using this website, please call 800-450-2010 Ext. 7100 for assistance.

State Licensing (Opens in New Window) | Privacy (Opens in New Window)
Terms of Use (Opens in New Window) | Electronic Consent Agreement (Opens in New Window)
Opens in new window Opens an external site Opens an external site in a new window