Just try it by following this procedure -- this is same way that those fancy calculators compute and anyone can do it to.

This is the simple procedure for turning a normal calculator into a fancy mortgage calculator and for computing how much you can afford:

The first calculation will determine how much you can buy. Take your salary, for our example we will use a salary of $35,000 a year.
• Then gather your monthly credit debts (a credit report is helpful). For our example we will use a minimum credit card monthly payments of $110 and a car payment of $190.
• Then take the $35,000 and divide that by 12 = $2916. Then times that by 42% (42% is a safe mortgage and debt approval guideline percentage) = $1225.
• Subtract the your monthly minimum debt $2915 - $110 - $190 = $925.
• Now you have to subtract from this number the potential monthly property taxes, monthly homeowners insurance payment, and monthly mortgage insurance payment, i.e.,  $925 - $58 - $50 - $50 = $794.
• So, the example income allows for a $794 monthly principle and interest mortgage payment (PI). Other calculations tell us that a yearly salary of $35,000 divided by 12 months equals $2916 and the total current monthly minimum debt payments are $300.
• Using the above $794 look at the Mortgage Rate / Calculator Ratio Chart above so that you can determine the loan amount/home sales price. If rates on the 30 year fixed rate mortgages are 6.125% and $794 is the allowable PI payment then divide $794 by 6.06 = $131,000 (On the Mortgage Rate / Calculator Ratio Chart the ratio calculations for an interest rate of 6.125% is 6.06). This means you should qualify (your credit scores are also an important factor) and look for a sales price of $131,000.
• For more information contact Brady Pierce at (435) 787-8351.