ENVOY MORTGAGE Blog

When people decide to buy a home, the monthly payment is a crucial factor. Conservative underwriting for mortgage payments state that borrowers should allocate no more than approximately 30% of their income for a house payment. Looked at from another perspective, this means if your monthly income is $4,000, you should keep your mortgage payment under $1,200 a month.

How much home can you afford?

Affordability is a function of home price, interest rate and down payment.

Here's a simple formula that drives that point home…

In simple terms, every 1% increase in home loan rates decreases the buying power of an individual by 10% in home price. This means that if you qualify for a home priced at $200,000 today and interest rates increase 1%, the amount you could qualify for would be reduced to approximately $180,000 to maintain the same payment.

Greg Iverson / Mortgage Banker

Envoy Mortgage LP

Direct: (877)907-6907 | Fax: (866)560-1801

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