Guidelines for Buying a House with Loan: Tips You Should Know (2）
What is PITIA?
PI = Principal & Interest, housing loan T = Tax, land tax I = Insurance, insurance A = HOA, management fee so PITIA refers to: monthly mortgage, land tax, insurance and management fee monthly amount. To show the bank that there are 6 months PITIA so much money in your checking account or savings account (Checking/Savings Account). The money does not need to be spent, but it must be stored in it. In addition to checking accounts or savings accounts such as cash accounts (Cash Sccount), stocks (stock), retirement funds (Retirement Account), and American pension plans (401K) are all available. However, stocks have to be discounted by 30%, and pensions have to be discounted by 40%. In addition, remember that you cannot use Gift Fund for housing loan applications, and all the funds and reserves must be your own money, even for couples! For example, if the man applies for a loan alone, he cannot use the woman’s funds, nor can he transfer money from an account with only the woman’s name to the man’s account, but the common account can be used. If there is really no alternative, you can consider two people to apply together. So if you have a plan to buy a house but don’t have enough funds, pay the money more than two months in advance and get ready, the bank will look at the bank statement for two months. For example, if you apply for a loan in September, the interval of the two statements is August 1st-August 31st and July 1st-July 31st, then the money will be paid in June or before.
However, if you need to use income, then you need two months of bank turnover; if your salary income is enough to carry the loan and do not need to use income, then one month's bank turnover is fine.
Quickly calculate how much you can loan
Before getting a loan, many people will ask: How much can I borrow? There is a simple algorithm. Before submitting to the bank for review, you can calculate how much you can borrow. The bank also roughly calculates it like this: mortgage + land tax + insurance + HOA+car loan+credit card repayment ≤45% of monthly income before tax. For example, an applicant wants to buy a house of 800,000 yuan and wants to see if he can get a loan of 600,000 yuan. Assuming that the interest rate he can get is 4%, then The monthly payment is $2,864.49, and the local tax bank generally calculates it at 1.25% per year, so the monthly payment is $833.33. Assuming that housing insurance is $100 a month, HOA is $300 a month, a car loan is $300 a month, and the repayment amount of several credit cards is $100, then the total amount of all expenses is $4,497.82/month. Assuming that the applicant's annual income is $120K, then one month is $10K.
Therefore, this percentage is 4497.82 divided by 10000 equals 44.97%, which is less than 45%, so this is the income he probably needs. You can simply calculate how much you can borrow according to this method.
Note: Depending on each individual’s situation, the percentage of some applicants can be limited to 50%
About credit and interest rates, etc.
Different banks have different requirements, but the credit score is generally 620 or more. The housing loan interest rate is a bit worse than that of the owner-occupied house, but not much. If other conditions are the same, from 0.125% to 0.500% is a normal range.
