Posted on: 02nd Feb, 2009 06:30 pm
I would like to know how large a HELOC I can afford. Or, rather, how much a bank will lend me. Our info:
Gross income: $42000
First mortgage: $105000
Home value: $180000-$190000
Monthly payments, PITI: $795
FICO (Experian) scores: 760 me & 740 wife
No other debt
Long, strong, credit history.
I would like to borrow $20K>305K for a new car.
Thanks,
PJ
Gross income: $42000
First mortgage: $105000
Home value: $180000-$190000
Monthly payments, PITI: $795
FICO (Experian) scores: 760 me & 740 wife
No other debt
Long, strong, credit history.
I would like to borrow $20K>305K for a new car.
Thanks,
PJ
Thanks for the reply. Isn't there a max. % that they will loan on a HELOC, based on all your other debts & assuming your have great credit? I was thinking total Debt-to-Income ratio might be somewhere between 35% and 40%. So, if my income is about $3500/mo, I should be able to have a total mo. indebtedness of around $1225 (35%) and $1400 (40%). Close?
PJ
PJ
The maximum loan amount offered can vary from one lender to another. As for the debt to income ratio, yes, it should be within 36% for conventional loans and 41% for FHA loans.
PJ said...
"I would like to borrow $20K>305K for a new car."
Can I make a suggestion that would help you to build wealth? I know that it is good to have a new car, but that price is half of your annual salary. It also looks like you would be going for a NEW car. Your payment will likely be more than $400 per month.
My suggestion would be to buy a quality used car for less than $10k. Your payments and insurance would be much less. You can take the difference in what you would have spent each month on a new car and put it against the principal balance on your mortgage, your retirement fund, college, etc
After a year, a new car is simply a used car anyway.
"I would like to borrow $20K>305K for a new car."
Can I make a suggestion that would help you to build wealth? I know that it is good to have a new car, but that price is half of your annual salary. It also looks like you would be going for a NEW car. Your payment will likely be more than $400 per month.
My suggestion would be to buy a quality used car for less than $10k. Your payments and insurance would be much less. You can take the difference in what you would have spent each month on a new car and put it against the principal balance on your mortgage, your retirement fund, college, etc
After a year, a new car is simply a used car anyway.
Do not use a HELOC to buy a new car. Never... NEVER!
If your situation changes and you can not make the payment on the HELOC... you could lose your house! Rather lose a car over a house.
Save up money for a car. If you have not debt, other than your house, just save up. Purchase a car a year old that is still under warranty. No since buying a new car. Let the suck before eat the depreciation.
If your situation changes and you can not make the payment on the HELOC... you could lose your house! Rather lose a car over a house.
Save up money for a car. If you have not debt, other than your house, just save up. Purchase a car a year old that is still under warranty. No since buying a new car. Let the suck before eat the depreciation.