akes your hand and says "You are approved for a mortgage up to $ XXX,XXX, no problem!"

So just how much of a mortgage payment is manageable for you? The best way to think of what would be a comfortable, affordable payment is to go back to the old school of thinking.

Take all your monthly installment and credit card minimum payments and get that monthly total. Then take no more than 38% of your gross monthly

I look at mortgage files every day and often find myself shaking my head at the mortgage payment I see that borrowers are about to take on. These are borrowers that think that as long as they are officially 'approved'for a mortgage they can afford the payment. This is often not the case.

As the age of automated underwriting came about in which the figures from a borrower's loan application gets entered into a program, a credit report is pulled and the loan decision is determined within minutes,out went the age of common sense underwriting.

If a given loan indicates a high enough credit score or a certain amount of equity in the property, often loans with a DTI (debt to income) level upwards of 60% are automatically approved by the underwriting systems in place today.

In the good old days when I would underwrite a loan that I had to make a sound decision on, this loan would be denied because an alarm would go off in my head that someone making $3000/month could not possibly pay a mortgage payment of $1800/month and still have money to comfortably live on. Keep in mind that this $3000/month figure that is used in qualifying calculations is gross income, that is, BEFORE taxes are taken out. After taxes are taken out the actual take home earnings could be $2250/month or less! Do the math. That only leaves $450/month for food, utilities, and any other bills. Could you survive with that little left over? I know folks whose car payments are more than $450/month!

These are the things that borrowers need to really think hard about.

Do not get enticed by the beautiful house you just have to have, or the smiling face of the loan officer who shakes your hand and says "You are approved for a mortgage up to $ XXX,XXX, no problem!"

So just how much of a mortgage payment is manageable for you? The best way to think of what would be a comfortable, affordable payment is to go back to the old school of thinking.

Take all your monthly installment and credit card minimum payments and get that monthly total. Then take no more than 38% of your gross monthly i

gram, a credit report is pulled and the loan decision is determined within minutes,out went the age of common sense underwriting.

If a given loan indicates a high enough credit score or a certain amount of equity in the property, often loans with a DTI (debt to income) level upwards of 60% are automatically approved by the underwriting systems in place today.

In the good old days when I would underwrite a loan that I had to make a sound decision on, this loan would be denied because an alarm would go off in my head that someone making $3000/month could not possibly pay a mortgage payment of $1800/month and still have money to comfortably live on. Keep in mind that this $3000/month figure that is used in qualifying calculations is gross income, that is, BEFORE taxes are taken out. After taxes are taken out the actual take home earnings could be $2250/month or less! Do the math. That only leaves $450/month for food, utilities, and any other bills. Could you survive with that little left over? I know folks whose car payments are more than $450/month!

These are the things that borrowers need to really think hard about.

Do not get enticed by the beautiful house you just have to have, or the smiling face of the loan officer who shakes your hand and says "You are approved for a mortgage up to $ XXX,XXX, no problem!"

So just how much of a mortgage payment is manageable for you? The best way to think of what would be a comfortable, affordable payment is to go back to the old school of thinking.

Take all your monthly installment and credit card minimum payments and get that monthly total. Then take no more than 38% of your gross monthly

n that I had to make a sound decision on, this loan would be denied because an alarm would go off in my head that someone making $3000/month could not possibly pay a mortgage payment of $1800/month and still have money to comfortably live on. Keep in mind that this $3000/month figure that is used in qualifying calculations is gross income, that is, BEFORE taxes are taken out. After taxes are taken out the actual take home earnings could be $2250/month or less! Do the math. That only leaves $450/month for food, utilities, and any other bills. Could you survive with that little left over? I know folks whose car payments are more than $450/month!

These are the things that borrowers need to really think hard about.

Do not get enticed by the beautiful house you just have to have, or the smiling face of the loan officer who shakes your hand and says "You are approved for a mortgage up to $ XXX,XXX, no problem!"

So just how much of a mortgage payment is manageable for you? The best way to think of what would be a comfortable, affordable payment is to go back to the old school of thinking.

Take all your monthly installment and credit card minimum payments and get that monthly total. Then take no more than 38% of your gross monthly

home earnings could be $2250/month or less! Do the math. That only leaves $450/month for food, utilities, and any other bills. Could you survive with that little left over? I know folks whose car payments are more than $450/month!

These are the things that borrowers need to really think hard about.

Do not get enticed by the beautiful house you just have to have, or the smiling face of the loan officer who shakes your hand and says "You are approved for a mortgage up to $ XXX,XXX, no problem!"

So just how much of a mortgage payment is manageable for you? The best way to think of what would be a comfortable, affordable payment is to go back to the old school of thinking.

Take all your monthly installment and credit card minimum payments and get that monthly total. Then take no more than 38% of your gross monthly

akes your hand and says "You are approved for a mortgage up to $ XXX,XXX, no problem!"

So just how much of a mortgage payment is manageable for you? The best way to think of what would be a comfortable, affordable payment is to go back to the old school of thinking.

Take all your monthly installment and credit card minimum payments and get that monthly total. Then take no more than 38% of your gross monthly income and subtract those debts from that figure. The remaining figure is the mortgage payment you should be able to handle without running into trouble within a few months of getting that higher mortgage.

If after doing those calculations that does not leave enough of a mortgage payment for the house you want, consider a smaller house to start with or possibly a less expensive area which may be away from the higher priced homes some but still affordable.

If you are in the market for a new house or your first home, please keep this article in mind. It may make the difference between getting a second job just to make ends meet and being able to sleep soundly at night!