For a $1500.00 per month mortgage payment what could we get for a home loan?

My husband and I are trying to purchase something. A lender told us we are able to get $350,000 loan which the payments would be $2,600.00 which I don't think we can afford. How much would be safe to get so we can pay $1,500.00 per month?

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  • 1 decade ago
    Favorite Answer

    OK, I will buck all mortgage agents right now, and tell you the truthful answer:

    NOBODY CAN TELL YOU!

    I work in the mortgage industry, and until I have a complete application, a credit report, and I lock your loan, I cannot tell you what your payment will be, nor can I tell you how much house you can afford on $1,500 per month.

    In addition, with the myriad loan programs out there, a $1,500 payment could be structured in many ways. With a negative amortization mortgage (Option ARM), you might be able to afford $400,000+, but your mortgage principle will go up each month until it equals 110-115% of the original amount. At that point, your loan will be recast and amortized over the remaining life of the loan. You can expect that your payment would increase to about $4,000-$4,500 at this point. Oh wait, you can't afford that. Well, you will just lose your house in a few years.

    On an interest-only loan, you might be able to afford something in the $300,000 range. For a fully-amortized payment, you might be looking at $150,000-$250,000 depending on the length of the mortgage.

    Oh, but wait! There's more. You will have to pay property taxes and insurance. That means that about 20-25% of your payment goes for these expenses. If that must come from the $1,500, then you must reduce the numbers above by up to 25%. Oops.

    If the houses you like are in the $350,000 range, then you cannot afford to buy a house just yet. I would recommend building your savings account over the next year or two, and then revisit the idea, based on your income at that time.

    For now, take the $1,500 per month, subtract your current rent, and put the rest into savings. Let that accumulate over the next year or so, because a lender will want to see that you have at least twice your PITI payment in savings before giving you a loan. In addition, you may need down payment money on top of that.

    If you ever run into a month in which you cannot make this deposit into your savings account, thank me, because I just saved your credit rating. This is a good test to see how much you can really afford for a house payment, without the risk.

    Don't worry about the market getting away from you. I don't expect to see house prices rising in the next two years to any great degree. You might find a "deal" in the meantime, but keep in mind that so many people are looking for deals, that very few real deals exist in the current market. People just feel like they are paying low prices for houses, when they are actually paying exactly what the market will bear.

    Owning a home is the second American Dream. The first is owning a business. I wish you luck in your quest, and I urge you to be prudent in search of this goal.

    Good luck to you. I hope that I have helped, at least a little bit.

    Source(s): 10+ years in the mortgage and real estate industries. See profile for additional background information.
  • 1 decade ago

    Holy Smokes! Look at all these answers...

    The answer is how much do you make?

    If your numbers are that much lower than the broker who pre-approved you, he may be quoting you on an interest only option ARM or something, which I DO NOT RECOMMEND.

    Sorry for yelling, but if you will stay in the home longer than, say ten years, then go with a fixed Rate Mortgage. Safe and secure.

    If not, go with a 5/1, or even a 7/1 ARM.

    There's nothing wriong with ARM's. They are a good product when used correctly. The point is to wrap up a lower payment for the introductory period, then jackrabbit out of it by selling and moving within that period of time.

    Just make sure there's no prepayment penalty on them, and they're a good-to-go product.

    Hope that helps, lots more where that came from.

    Source(s): www.amnatmortgage.com Loan Officer (nationally licensed)
  • 1 decade ago

    Well it all depends on your interest rate you will be receiving for the loan. (credit)

    One says an arm loan. Stay CLEAR of a arm loan. Those are the loans that everyone is in trouble with todays foreclosures.

    Be sure you get a fixed 30-40 year fix interest rate loan.

    Have the 20% down payment for the home.

    The rule of thumb of past years was about 10% of the total homes value. Guess what that same rule applies even today.

    The one person in here has that one correct.

    Any loan officer that tells you to get an interest only or a ARM loan. Run for the hills and get another loan officer. Be sure before you sign your loan papers have your attorney look over those papers.

    Also have them look over all of your legal documnets before you sign a thing.

  • Anonymous
    5 years ago

    I'm confident that you might find every financial clarification at= loandirectory.info-

    RE For a $1500.00 per month mortgage payment what could we get for a home loan?

    My husband and I are trying to purchase something. A lender told us we are able to get $350,000 loan which the payments would be $2,600.00 which I don't think we can afford. How much would be safe to get so we can pay $1,500.00 per month?

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  • Ang
    Lv 4
    1 decade ago

    That is difficult to say. There are lots of variables that you will have to consider first.

    The best advice I received before I bought my house was to take the amount that I was spending on rent and multiply it by 2.5. That's what it really takes to pay for a home monthly...a term called "true cost of ownership."

    Things that I didn't think about like property taxes, PMI, home owner's insurance, increased/additional utility bills (I never paid a water bill when I lived in my apartment!), money for unexpected repairs, lawn care, etc were all things I had to budget for monthly once I bought my house.

    I could make my mortgage payment fine, but I freaked when I got my first heating bill ($486 for one month!).

    Second best advice I got: never take out what the bank tells you that you can afford!

    I'm not trying to discourage you, but to give you something to think about other than just the monthly mortgage payment. Information is key.

  • 1 decade ago

    if you can get a loan for ONLY 350,00 and you would have a mortgage of 2,600! either your credit is not good or you have a BAD Lender.. I would suggest you wait a year SAVE your money pay off ALL out standing debts and keep your Credit GOLDEN .. then try again the way the market looks you won't loose out by waiting a while and you will most likely save money

  • Anonymous
    1 decade ago

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  • Anonymous
    1 decade ago

    You could probably get a $120,000-$150,000 loan for that payment amount, depending on property taxes, insurance and interes rate costs.

  • chante
    Lv 6
    1 decade ago

    http://www.bankrate.com/

    Take your downpayment, the loan term and the mortgage rate and use the mortgage calculator. Then divide the taxes on the multiple listing and divide by 12. This is a good estimate of your monthly mortage cost.

  • Lisa
    Lv 4
    4 years ago

    Sure. In fact with a $150,000 salary, you could pay it off in 2 years. The point is, without knowing your expenses, its impossible to know. Income is less important than debt/income ratio. I know people that make well over $200,000 a year, and live day to day, one step away from bankruptcy.

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