Posted by Dave K on November 23, 2005 at 15:06:58:
Ok, I know it can be very broad depending on the type of loan. I was just trying to get an idea. So I guess I can’t go wrong with doubling the payment to come to a gross income needed. I guess a lot depends on if I want to get them a loan quick or slow. A huge monthly spread with a small back end or a small monthly spread with a huge back end.
installing tenants - Posted by Dave K
Posted by Dave K on November 21, 2005 at 12:11:27:
I’m about to run an ad to build a buyers list. Is there an easy formula to determine the approximate gross monthly income for a home. In this case, I’m marketing this house for $157,000.
??? - Posted by Jimmy
Posted by Jimmy on November 22, 2005 at 07:26:57:
the cost of the house HAS NOTHING to do with the rents it will fetch. The rental market is completely independent of the resale market. Do your homework. Find out what other SFR’s in the area fetch. Pay attention to bedrooms and bathrooms, as this is critical detail in determining rents.
Re: ??? - Posted by Dave K
Posted by Dave K on November 22, 2005 at 08:49:00:
I should have said that this is a LEASE OPTION. I know I have to watch area rents, but I still need to have an idea of the monthly gross income needed to eventually get them qualified. What I’m trying to sell the house for does come into play then. Plus I need to screen out those that don’t have the income.
Re: ??? - Posted by DoubleJ
Posted by DoubleJ on November 22, 2005 at 12:33:15:
Just go by the mortgage calculator to figure how much they would need to make.
For instance $157,000 at 7% interest on a 30 year fixed is : $1044.52.
Re: ??? - Posted by Dave K
Posted by Dave K on November 23, 2005 at 12:02:16:
I’m a little slow on the uptake this week. $1044.52 is the payment, correct. (157K at 7%) I forget, what percentage can your payment be of your monthly gross?
Re: ??? - Posted by Milo Brom
Posted by Milo Brom on November 23, 2005 at 22:22:14:
Usual it is around 30% - 32% of gross. So they need about $3,480 a month for $1,044 repayment. or for quick workings just multiply rent time 3 for rough amount of gross.
Knowing this number also means if they have credit card payments that needs to come out of available monies.
So if they make $3,500 a month then they would have about $1,050 $1,120 available for loan payment. Now find out their credit card limit - it is normally about 2% min payback.
So if they have limit of $5,000 then min payback is $100 a month. If you have 30% - $32% of their income then take away $100 and see if it still within available income for your loan. If it is, you can go ahead.
This is how bank work it out when not being silly and offering 50% of income repayment loans.
Milo
Re: ??? - Posted by DoubleJ
Posted by DoubleJ on November 23, 2005 at 12:48:08:
It depends on the lender, and the rest of the scenario. Sometimes its 50% for your total debt to income.
You can always do a stated income loan, and not worry about DTI. But you have to verify assets.
Or you can do a no-doc loan and verify nothing, but get even worse terms.
Re: ??? - Posted by Dave K
Posted by Dave K on November 23, 2005 at 12:09:06:
I’m sorry, I’m wrong. 157000 with 10% down @ 7% interest is 300 and change. Correct? Now, how do you figure the monthly gross needed. This is the one thing I have had trouble grasping. If someone puts it to me with a simply formula, I’ll understand.