Korea Reviews - 5 Ways to Calculate How Much House You Can Afford

Particularly for those looking to buy their first home, the big question is always, “How much house can I afford.” I can still remember my wife and I trying to crunch the numbers when we bought our first home back in 1993. I was scared to death that we wouldn’t be able to afford the mortgage payments. But we did, and as the months and years went by, our mortgage payments became more manageable.
If you’re considering buying a home, it helps to have an idea of how much you can afford. It’s very important to think of this question from two different perspectives. The first is simply how big of a mortgage will you qualify for. The answer to this question depends on a lot of factors, including your income, existing debts, interest rates, credit history and your credit score. We’ll look at several calculations that most lenders use to evaluate mortgage applicants.
The second perspective is a bit more subjective–how much home do you really need? Just because you can qualify for a mortgage, doesn’t mean that you should. Banks will qualify you for as much as they possibly can given their existing underwriting policies. But just because the money is available doesn’t mean you should take it.
With that, let’s look at 5 ways to calculate how much house you can afford, beginning with a standard rule of thumb:
2.5 to 3 Times Your Annual Income
This was the basic rule of thumb for many years. Simply take your gross income and multiple it by 2.5 or 3 to get the maximum value of the home you can afford. For somebody making $100,000, the maximum purchase price would be $250,000 to $300,000.
Keep in mind that this is a very general rule of thumb, and there are several factors that will influence the results. For example, the lower the interest rate you can obtain, the higher the home value you can afford on the same income. This is one reason why your credit score is so important. A good credit score of 760 or higher can net your an interest rate that is 1.5% lower than if you had a fair score of say 620. A 1.5% lower rate can easily translate into savings of tens of thousands of dollars over the life of a mortgage.
If you don’t know your credit score, you can get your FICO score for free from one of several credit scoring companies. Also keep in mind that some suggest higher or lower multiples. I’ve seen banks recommend ratios as low as 1.5 times salary or as high as 5 times salary. I think that for most situations, a good starting point is 2.5x your income.
The 28% Front End Ratio
When banks evaluate your home loan application, one very important calculation is known as your housing expense to income ratio. Also called the front-end ratio, banks will take your projected housing expense for the home you want to buy (principal, interest, taxes and insurance) and divide by your total monthly income. Generally, mortgage companies are looking for a ratio of 28% or less.
For example, if your income is $10,000 a month, most banks will qualify you for a loan (subject to other factors, of course) so long as your total housing expenses does not exceed $2,800 each month. While the 28% mortgage to income ratio is followed by many institutions, some will qualify a borrower with a slightly higher ratio.
The 36% Rule
Even if your housing expense to income ratio is 28% or less, you still have one more hurdle to clear—the debt to income ratio. Also referred to as the back-end ratio, it takes your total monthly minimum debt payments and divides by your gross income. Debt payments include not only your projected mortgage, but also minimum credit card payments, car loan payments, school loan payments, and any other payments on debt.
Bankers typically are looking for a back-end ratio of no more than 36%, although some will go a bit higher than this. To relate both the 28% and 36% numbers, here is a chart showing the calculations for various income levels:
$20,000
$467
$600
$30,000
$700
$900
$40,000
$933
$1,200
$50,000
$1,167
$1,500
$60,000
$1,400
$1,800
$80,000
$1,867
$2,400
$100,000
$2,333
$3,000
$150,000
$3,500
$4,500
Special HFA Rules
An FHA mortgage has special rules set by the government. For the mortgage payment expense to income ratio, the percentage cannot be greater than 29%. For the back-end ratio, the maximum to still qualify for an FHA loan is 41%. Note that although FHA loans are government sponsored, you still apply for the loans through private banks and mortgage companies. If you’d like to get see current rates, check out our mortgage rates, which are updated daily.
The Dave Ramsey Mortgage
Dave Ramsey takes a very conservative approach to home buying. If you can, he believes you should pay cash for a home. But if you do have to finance the purchase, Ramsey says you should finance your home with a 15-year mortgage and that your mortgage payments, including insurance and taxes, should be no more than 25% of your take home pay. He also believes you should not buy a home until you have a 20% down payment.
If you decided to follow Dave’s approach, simply divide the amount of down payment you have available by .20. For example, if you have $25,000 saved for a down payment, the maximum amount you could spend on a home would be $125,000 ($25,000 / .20). Using this example, you’d finance $100,000 on a 15-year mortgage. At prevailing rates, and making some assumptions about insurance and taxes, the monthly payment would be about $1,000.
Of course, you’ll also need the income to handle the mortgage payments. Here is a table of your maximum monthly payment under the Dave Ramsey approach to mortgages. I’ve assumed take-home pay is 75% of gross income:
$20,000
$1,250
$312
$30,000
$1,875
$468
$40,000
$2,500
$625
$50,000
$3,125
$781
$60,000
$3,750
$937
$80,000
$5,000
$1,250
$100,000
$6,250
$1,562
$150,000
$9,375
$2,343
If you are a first-time home buyer, following Dave’s approach is going to be very difficult. Heck, it may be difficult if you are buying your second or third home. We certainly could not have bought our first or second home under these conditions, but it’s still an approach to consider.

Springhill Group Home - June Household Loan Balance Hits Record-high Level - Korea Reviews

June Household Loan Balance Hits Record-high Level | Korea IT  Times

SEOUL, KOREA- The June balance of household loans by commercial and deposit banks has hit the record-high level. According to the Bank of Korea on July 9, the balance of loans made out to consumers in May was 659,987.7 billion won, up 3.4 trillion won from the previous month.

The balance has kept increasing for the past three consecutive months. This is the highest level in five months since the previous high of 659,858.3 billion won recorded in December last year. Lee Jae-ki, Bank of Korea senior manager responsible for financial statistics, said, "It may be due to the government's April 1 measure to stimulate the real estate market as well as the seasonal factor that May is traditionally a month for which many more home buyers take out mortgage loans."

With a rise in home buying, the home mortgage loan balance has increased by 2 trillion won. Other types of loans such as credit line have increased by 1.4 trillion won.

http://springhill.blog.com/2013/07/11/springhill-group-home-june-household-loan-balance-hits-record-high-level-korea-reviews/

Related Stories
http://tonybricks96.edublogs.org/
http://www.xing.com/companies/springhillgroupseoulkorea
http://springhillgroup.livejournal.com/

Springhill Group Home Loans - Reasons You Could Ruin Securing The Lowest Mortgage Rate



It is up to you and it involves your necessary steps in order to make your application desirable to lenders when it comes to securing the lowest mortgage rate possible. In the case that you already know what lenders requires when they evaluate your home loan you must now do what is needed to make certain that you’ll get the home loan you desire and the home loan you are dreaming of. Be found lacking in taking these steps can be unfavorable to your probability of home ownership.

The following are six sure fire approaches to wreck your likelihood of securing the lowest mortgage rate:

Having poor credit - Bad credit is a definitely a sure destroyer when it comes to acquiring a low rate on your mortgage. In the condition that your credit rating is depleted afterward you can anticipate to be offered an extensively higher interest comparing to those who have finer or exceptional credit. In some cases, you may even be completely denied credit or have to get hold of a bad credit mortgage. Concentrating to your credit issues prior to trying to purchase a home loan can spare you the frustration of not getting the penny-pinching interest rates.

Having too many debts - Even though you have good credit, holding excessively many debts can as well disapprovingly impact your chances of securing an reasonably priced mortgage rate. The higher your debt-to-income ratio is, the more possible you are to be presented a sky-scraping interest rate or less advantageous loan terms. What you need to do first is pay down your debts and you will boost your probability of getting the greatest rates possible.

Not having enough in savings - The less money you have in savings or that you can place towards a down payment, the more you’ll need to have a loan of, basically making you more of in a fortuity. Having reserves is a good deal tool and can assist you counteract every unforeseen financial troubles.

Not comparing loan rates & fees - weigh against rates is a brilliant method that you can be guaranteed of getting the most excellent deal existing. Agreeing to the initial rate you are referred or deciding on a rate based only on the information given by one lender can be very unfavorable and will cost you money.

Not researching your broker & lender - Not every broker or lender has the loan you require or the means to find you the loan you want. Deciding the right broker and lending company is one of the most vital processes in acquiring the lowest mortgage rate possible.

Not asking enough questions - throughout the home buying procedure, inquiring on questions is one of your finest means in getting the responses and information that you want. Do not be terrified or be indecisive to raise any questions that you might have. If you will not going to do this, it will cost you more harm than good.


Springhill Group Korea : News Center - Springhill Group Home Loans - Google+

http://www.grjm.net/story.php?title=springhill-group-korea-news-center-springhill-group-home-loans-google

Springhill Group Home is a housing finance company with the principal goal of achieving a social requirement of motivating home ownership by offering long-term finance to households. Springhill Group Home has turned the idea of housing finance in Springhill into a world-class business venture with outstanding reputation for dependability, honesty and outstanding services. 

Springhill Group Home has a wide network of contacts from different loan companies within United States and Asia catering to towns & cities spread across the country providing housing loans and property advisory services. 

For inquiries, email us at info@springhillgrouphome.com 

Springhill Group, Springhill health and medical group: Health Services

http://www.myvideo.de/watch/8836753/Springhill_health_group_Health_Services


Collage_health

Springhill Group has been providing solutions that improve health and quality of life for those in need. Springhill  is focused on patients and dedicated to delivering quality patient care and service.  We provide patients with the care they need and the comfort and independence they deserve.
  
Clinical Service Delivery: Responding to the unique needs of  patients and their families by offering skilled nursing care, and home safety evaluations.
  Healthcare-
Patient-Centered Care: Springhill’s patient-centered care is customized to meet the requirements of each patient and allows them to remain in the comfort of their homes.
  
Quality Improvement: Routine review of policies, processes and procedures enables Springhill Group’s to continuously improve its standard of care delivery.
  Technology_healthcare_costs
Healthcare Technology: Investment in healthcare technology allows Springhill to further improve services and to greatly enhance communication as well as invest more in the quality of patient care through increased efficiency.

Springhill Group: Springhill health and medical group, Health Services

http://faithpiperdotorg.wordpress.com/2012/11/08/springhill-group-springhill-health-and-medical-group-health-services/


Springhill Group has been providing solutions that improve health and quality of life for those in need. Springhill  is focused on patients and dedicated to delivering quality patient care and service.  We provide patients with the care they need and the comfort and independence they deserve.
  Hjdj
Clinical Service Delivery: Responding to the unique needs of  patients and their families by offering skilled nursing care, and home safety evaluations.
  HealthSERVICES
Patient-Centered Care: Springhill’s patient-centered care is customized to meet the requirements of each patient and allows them to remain in the comfort of their homes.

Springhill health group - Health Services

http://www.dailymotion.com/video/xuwi25_springhill-group-health-services_news


Collage_health

Springhill Group has been providing solutions that improve health and quality of life for those in need. Springhill  is focused on patients and dedicated to delivering quality patient care and service.  We provide patients with the care they need and the comfort and independence they deserve.
  Healthcare_B
Clinical Service Delivery: Responding to the unique needs of  patients and their families by offering skilled nursing care, and home safety evaluations.
  Healthcare-
Patient-Centered Care: Springhill’s patient-centered care is customized to meet the requirements of each patient and allows them to remain in the comfort of their homes.
  Norfolk_Picture_2_1-578x390
Quality Improvement: Routine review of policies, processes and procedures enables Springhill Group’s to continuously improve its standard of care delivery.
  Technology_healthcare_costs
Healthcare Technology: Investment in healthcare technology allows Springhill to further improve services and to greatly enhance communication as well as invest more in the quality of patient care through increased efficiency.

Powered By Blogger

About this blog

About Me

Followers

Blog Archive

Powered by Blogger.