Your Questions About Mortgage Payment Calculator

Lizzie asks…

School/Property Tax Question?

Why is it that most states make home owners pay school/property taxes regardless of whether they have children or not? And in turn, why don’t people who rent and have children not have to pay these taxes? I believe that most first time home buyers don’t know and are not educated on the extra expenses that taxes add to their mortgage payments and/or overall annual housing costs. Why isn’t this explained better (i.e. all online mortgage calculators should be mandated to allow added tax costs to figure out the TRUE monthly mortgage payment)?
Could this play a major contributing factor to the rise in foreclosures in America? Why can’t local governments see that if they started charging school taxes to families that have children regardless of their mortgage or renting status that it would be better for the school systems and make it a better and a more fair economy? People may not be so apt to have alot of children if they know they have to pay school taxes whether they owned or rented

admin answers:

We were all kids at one point in time and our parents paid school/property taxes. It would be a property tax nightmare to base how much to charge for your property taxes on whether or not you had kids. The town/city would have to ask everyone if they had kids or not. What about people who send their kids to private school? Or the people who through school choice send their kids to a school in another community? The towns/cities might as well offer everyone a choice as to what they want to be taxed on. Want fire protection? Police protection? Want public works? Etc. It just wont work for taxing people with kids at one rate, and people without kids at another.

Daniel asks…

How much do you need to make to be able to afford a house in Southern California?

I need some concrete advise here. I know all about needing good credit etc, but this issue is that I make about 65k a year, am single so no double income, and looking around it seems almost impossible to be able to buy a DECENT and NICE house in a good ne4ighborhood in the LA area.

While i I dont want to live in a hut in south central or some other run-down neighborhood, I also dont expect to be living in a 10 million dollar mansion, but even moderately prized places that are somewhat decent (and dont look like they needed renovation etc) in West LA, Pasadena, West Hollywood etc are about a million or so.

Down payment also doesnt seem to be making a huge difference: when you do those online mortgage calculators, the difference in mortgage between down payment and no-down payment is about 500 dollars a month. So, whether i dont own a house and save up for 5 years 500 dollars a month, or own a house and pay 500 dollars more every month in mortgage, doesnt make a difference with respect to end results.

So how am I on 65k and then after raises on a 90k salary going to afford a house? I know good credit is important, but let’s say you got all that….the mortgage payments are prohibitive (5000 a month for a 500k mortgage etc).

How does anybody afford a house? Be a millionaire? Be married and have a combined income of 500k? That doesnt seem right, as i know people with moderate incomes that own.

Who do I speak with? Where do I start?

admin answers:

The problem today is no one wants to start off at the bottom.

Lisa asks…

How much money does the tax deductable for a home purchase save me?

I would like to understand the tax benefits of buying a house a bit better and how to do the math.

If I get a 400.000 loan over 30 years at a 5% interest rate, then my monthly payments will be somewhere between $2100 and $2300 (based on online mortgage calculators).

I understand that the interest on the loan is tax deductible part. Can anyone help me figuring out how much money that would save me per year?

admin answers:

The answer would depend upon your tax bracket. For example, if after other deductions you are in the 25% bracket, the tax savings would be the amount of interest paid that year times 25%.

Donna asks…

How much house can I buy?

My wife and I have a combined income of around $182000. Over the last three years we have been able to save $125000 for a down payment which is more than we ever intended to. As far as other debt we only have about $15000 in student loans but they are paid for by my father (long story but my student loans funded my parents divorce) so he will continue to pay them. Mortgage calculators are giving me really high numbers that I am not sure are accurate….

admin answers:

About $665,000.

The issue has to do with debt ratios. A rule of thumb is that you can afford a mortgage that is about 3 times your gross annual income (before taxes).

In general, lenders will let you spend up to 28% of your gross monthly income on your mortgage payment (including property taxes and insurance).

Your total debt load (mortgage plus car payments and minimum payments on revolving balances) must not exceed about 38% of your gross monthly income.

These numbers are realistic general guidelines and your situation could be different.

Carol asks…

Grad student – am I a good candidate for a mortgage?

I am 23, turning 24 this year. I am a PhD graduate student and will be for another 3-4 years. I am paid a stipend of $24k/yr and my tuition and health insurance is covered as long as I’m in school. My FICO is 760. I have $16k in student loans from undergrad that are currently deferred until I’m finished with school. I have no credit card or consumer debt, never had. I have $4k in retirement funds and $2k in an emergency fund. My savings account should be up to $6k by December, unless something goes wrong. All this I have saved from my measely income for 2 years. I also own my car outright, paid for in cash. (In that timeframe I’ve also covered moving expenses and an apartment full of new furniture + electronics.) So I would say I’m pretty good with money for my age.

My current rent is $675, nothing included. I’m wondering if it is smarter to buy. I will stay in the area for another 3 years, perhaps more if I decide to stay and work here after graduation. I have a good FICO score so I think I would get a reasonable rate (5.0%?). My credit report shows 5 years of history, all my accounts are in good standing, nothing negative. My available credit limit is approx. $10k and I never carry balances. In my area, I can get a 1bd/1ba condo for $100k, HOA fees approx $150/mo. If I apply for a 30yr mortgage, according to the calculators my monthly payment can range $530-730. I will only have the $6k from savings to put down though. But with Obama’s $8k incentive…. do you think I should even be thinking about buying? I would just really like to have a “home” and not have to apartment-hop after every lease due to management, move furniture, not allowed pets or this or that anymore.

Would they even look at me if I walked into a bank to ask about my loan eligibility?

TIA. Advice from loan officers or those experienced in mortgages are greatly appreciated!
I want to add that I would do the FHA.

admin answers:

You can ask but you need 2 years work and tax returns to prove it, yes you are doing good but in school with no work record so they will look at it as yes it is good now, but what of the next year or so

Powered by Yahoo! Answers