First
Mortgages
Prequalification Worksheet
This worksheet will assist you in understanding the general guidelines
and ratios used by many financial institutions for mortgage loans.
It is important to note that the ratios you calculate on this Pre-Qualification
Worksheet are only guidelines. The final determination of your loan
eligibility depends on many factors, including but not limited to,
your credit history, income and employment stability, current indebtedness,
financial condition and the amount of your down payment.
While Items 1, 3 and 4 are self-explanatory, tables have been provided
elsewhere to assist you in determining the principal and interest
amount required in Item 2. For example, if you wanted a 30-year,
$150,000 mortgage and if the current annual interest rate was 10%,
you would enter $1,316 (from the payment
chart) on the principal and interest line provided in Item 2.
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Total |
| 1. |
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Current Total Gross* Monthly Verifiable Income
Borrower $___________
Co-borrower $___________
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$__________ |
| 2. |
a. |
Projected Total Monthly Housing
Expense (for the property you are
purchasing or refinancing)
Principal and Interest (see
payment chart) $__________________
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b. |
1/12th
of previous year’s
real estate taxes $__________________
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c. |
1/12th
of hazard insurance premium $__________________
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d. |
Monthly
Condominium Fees or Homeowner’s
Association Dues, if applicable
$__________________
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Total Monthly
Housing Expense (add 2a through 2d)
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$__________
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| 3. |
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Monthly Obligations (Monthly
obligations for which more than ten payments
remain) |
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a. |
Automobile loans $ ____________ |
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b. |
Credit card/revolving debts
$ ____________ |
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c. |
Unsecured installment loans
$ ____________ |
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d. |
Net rental income loss (if
any)** $ ____________ |
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e. |
Other $ ____________ |
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f. |
Other $ ____________ |
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Total (add 3a through
3f)
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$__________ |
| 4. |
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Projected Total Monthly Obligations
(Projected total monthly housing expense
plus monthly obligations from totals in
item 2 and 3)
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$__________ |
| 5. |
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Ratios |
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a. |
Housing Expense Ratio
Total from Item 2 $ ____________
÷ Total from Item 1 $ ____________ =
(This ratio should be 33% or less for loan amounts greater
than $203,150; .28 or less for loan amounts of $203,150
or less.)
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_________% |
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b. |
Debt Ratio
Total from Item 4 $ ____________
÷ Total from Item 1 $ ____________ =
(This ratio should be 38% or less for loan amounts greater
than $203,150; .36 or less for loan amounts of $203,150
or less.)
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_________% |
It is very important to note that these ratios are only guidelines.
Somewhat higher ratios may be acceptable. A final determination
of your loan eligibility will be made by a loan officer when the
processing of your loan request has been completed.
How Much Can I (We) Borrow?
Quick Qualification
If you (and a co-applicant, if any) are just beginning to “shop”
for a home or considering refinancing your existing mortgage, you
may use the following QUICK QUALIFICATION table to determine the
approximate first mortgage loan amount for which you (and a co-applicant)
may qualify:
Adjustable Rate Loan
Total (combined) annual income (net after taxes) $ ____________
x 4.3 = Approximate Loan Amount $ ____________
Fixed Rate Loan
Total (combined) annual income (net after taxes) $ ____________
x 3.6 = Approximate Loan Amount $ ____________
Please note that the actual loan amount for which an applicant (or
applicants) may eventually qualify depends on many factors. These
factors include, but are not limited to, an applicant’s credit history,
income and employment stability, current indebtedness, financial
condition, the amount of the down payment, etc.
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