The housing market has an amazing opportunity for a major upswing with the current mortgage interest rate. The 30 year fixed mortgage is set at 3.125% with the average approved mortgage loan coming in at 3.52%. This remains the lowest interest rate available since 1971.
This means for every $100,000 you borrow you will pay roughly $450. This is a quick and easy way to calculate what your mortgage would be. Mortgage approval is typical dependent upon your income being 3 times the loan. To calculate if you would qualify for the house you want figure how many $100,000 amounts you would need x $450. If the result is at or below 1/3 of your income then you will most likely get approved without hassle.
For example, if you want to qualify for a $400,000 house then times $450 by 4. The result of $1800 would be your approximate monthly mortgage. To qualify for this loan your documented income should be $5400.
If your a sole proprietor that makes income through various sources and your trying to qualify for a mortgage be sure to include all of your income on your tax filings. Paying your taxes ensures that you are compliant and it qualifies you to get the house you want.
If your currently renting you are probably paying the same amount but you do not own the property and you are not building equity.
Now is a great time to take advantage of this rate if you want to buy, refinance or invest.
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Data source: bankrate
