| Field | Description |
|
Enter your gross monthly income |
This is the amount of money you make each month prior to taxes. |
|
Enter your monthly long-term |
This is the total amount you pay each month for car payments, student loans, medical/health care payments, alimony/child support payments, and other installment loan payments with a balance of 10 months or more (e.g. loans to purchase furniture, appliances, etc.). |
|
Enter the down payment you will make (%) |
This figure is the percentage of the purchase price of the home that you will pay as a down payment. For example, if you are purchasing a $100,000 home, and you are making a 10% down payment, you will put $10,000 of your own money towards the purchase of the home and borrow the remaining $90,000. |
|
Enter the length of the loan in years |
This is the number of years in which you plan to repay the loan [mortgage] you use to purchase your home. For purposes of this worksheet, choose either 15 or 30 years. |
|
Enter the interest rate of the loan |
This is the interest rate you will pay on the loan, called a mortgage, that you use to purchase your home. |
|
Enter the price of a home you have in mind (optional) |
If you have a home in mind and you would like to know if it is in your approximate price range to purchase based on monthly income, debt, down payment, and loan information you provided, enter the purchase price here. |
|
The amount allowed each month for your housing expense and long-term debt payments is: |
The amount you are allowed each
month to spend on housing (principal, interest, taxes, and insurance) and
long term debt payments. (A house payment is actually a combination of four
expenses: the principal on the loan, interest on the loan, taxes on the
property and insurance on the property. In most cases you must have all
four. Principal and interest typically account for 80% of the total, taxes
and insurance 20% of the total.) There are two types of financing used in this example: conventional financing and Special Financing provided through HomeSteps. Conventional financing is financing obtained through a lender which is neither insured nor guaranteed by the federal government. Through participating select lenders, HomeSteps offers special financing programs that can save you money. Conventional Financing: The amount borrowed
should not exceed 36% of your gross monthly income. This figure is calculated
by multiplying your gross monthly income by .36. |
|
Your estimated monthly housing expense allowed is: |
The amount available to you to spend (each month)
on housing (principal, interest, taxes and insurance). This is calculated
by subtracting your long term debt payments from the amount you are allowed
each month for your housing expense and long term debt payment. |
|
Your estimated monthly principal and interest payment is: |
The sum of your estimated principal and interest payments estimated above in the Monthly Housing Expense. The average amount of a house payment that is allocated to principal and interest is 80%. For both the Conventional and HomeSteps Special Financing, this is calculated by multiplying the Monthly Housing Expense above by .80. |
|
Your estimated maximum loan amount is: |
The highest loan, or mortgage, amount you can
afford. This is based on the Estimated Monthly Principal And Interest
Payment and the loan term and interest rate you entered above. |
|
Your estimated home affordability price is: |
The estimated maximum home price to target for your purchase, based on the down payment you are willing to make and the Maximum Loan amount above. |
|
Is the home you have in mind in your affordability range? |
If the price of the home you entered is higher than the Estimated Home Affordability Price, this box indicates NO. If the price of the home you entered is equal to or less than the Estimated Home Affordability Price, this box indicates YES. If you did not enter the price of a home you had in mind, this box is empty or N/A. |