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Your home equity equals the current value of your home minus your current mortgage debt. Assume your home’s current value is $410,000, and you have a $220,000 balance remaining on your mortgage.
For example, if your pre-tax monthly income is $8,000 and your mortgage payment is $2,000, you have a front-end ratio of 25% (meaning that your mortgage consumes 25% of your income).
A potential borrower can use an online mortgage calculator to see how much property he or she can afford. A lender will compare the person's total monthly income and total monthly debt load. A mortgage calculator can help to add up all income sources and compare this to all monthly debt payments.
It’s likely possible to qualify for a $120,000 mortgage, or even one up to $249,000, with a $70,000 salary—depending on factors such as your down payment and any existing debt you’re carrying.
Negative equity The status of a homeowner whose outstanding mortgage debt is larger than the property’s current worth. For example, if your house’s fair market value is $300,000, but you owe ...
Here are some of the calculations that one may expect to see from a property investment calculator along with definitions. Cash on cash return – Cash flow in year 1 divided by cash invested in the property. Equity build up rate – Increase in equity in year 1 from mortgage principal payments divided by cash invested in the property.
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