matrix 0 Report post Posted November 25, 2004 what is the mathematical basis for the 1% rule in estimating payments and rents thanks Share this post Link to post Share on other sites
-Tony- 0 Report post Posted November 25, 2004 Ones rent would be 1% of the FMV example 100k house would rent for 1k. You will want to know your area because it may not be a true 1% rule in my area it is about a .85% rule, meaning on a 100k house I would recieve $850 in rent. You also want to make sure that 75% of your rent will cover your mtg, if it doesn't your lender could view it at a loss of income. See, most lenders only take 75% of your rent payment and put it towards the mtg. If the 75% of the rent is $750 and the mtg is $800, your lender sees that as a $50 loss in your income per month. But, with l/o none of this effects your income. this is more for conventional buying. Share this post Link to post Share on other sites