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Conventional Mortgage Qualification Worksheet
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Income
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Annual Income
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Monthly Income
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Salary or wages
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Other salary or wages
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First Qualifying Number
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Rental income
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Investment income
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=
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Additional income
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/12
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=
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Total Income
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Second Qualifying Number
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Long-Term Debts
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Monthly Debt
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Annual Debt
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Car loan payments
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=
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Credit card payments
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/12
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=
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Other loan payment
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Other loan payment
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Total Debts
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Qualifying
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The first qualifying number (above right) calculates your maximum monthly payment, assuming you
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have no long-term debt. It is computed by multiplying your total income by your housing cost ratio
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and dividing the result by 12. The second qualifying number takes into account your monthly debt
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payments, applying your total debt service ratio. Mortgage companies usually qualify you for monthly
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payments that are no higher than the lesser of the two results. By default, this worksheet assumes
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a housing cost ratio of 0.28 and a total debt service ratio of 0.36, which are standards often used for
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conventional mortgages. If different ratios apply in your case, change the values in the cells below.
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Housing cost ratio
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Total debt service ratio
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You may qualify for monthly payments of
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Loan Amount
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The table below calculates the amount of a loan you might qualify for with the monthly payment shown
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above. Depending on the circumstances, some or all of the following will be true:
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• In all cases, your monthly payment will include principal and interest payments.
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• In most cases, it will include a monthly escrow deposit to cover taxes and mortgage insurance, if any.
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In some cases, homeowner's insurance is also included in this calculation.
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• If you are buying a condominium or co-op unit, the monthly payment figure may also include your
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homeowner's dues and/or maintenance fees. You will need to estimate these monthly costs and type
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them into the appropriate cells below.
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Important:
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Total monthly payment allowed
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This worksheet provides
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Estimated monthly escrow payment
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a rough estimate for
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Homeowner's insurance, if applicable
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conventional, fixed-term
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Homeowner's dues and other fees, if any
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mortgages. Loan terms
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Annual interest rate (e.g., 7.125)
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vary depending on type
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Duration of loan (in years)
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of mortgage and lender
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Monthly principal + interest payment
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policies.
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Consult a professional
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Maximum loan amount
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lender for exact data.
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