A family member of mine has a credit score of 800.
He's looking for a fixed-rate 30 year loan, for a 2nd home(vacation home, investment, etc).

If only 5% is put down on the house, how high can he go in total value to keep the payments at or under $1,000 per month?

I feel that $200K or so would be the mark, but it's confusing because many websites take it as high as $225K, and some as low as $175K.

The property tax of 1%, along with other costs - could be recovered with the tax writeoffs each year so we're focusing on the actual monthly mortage payment here.

Thank you for any expert opinion. If you happen to represent a lender and can offer any terms, we would be very happy to consider anyone from this forum.

On a 30 Year Amortization at 4.75% Fixed, that Maximum Loan would be $191,700.

So with 5% down, his Purchase Price is $201,800 +/-. (Actually $201,789.47)

HURRY . . .. Give me another while I have this calculator out.

What's his real interest rate on a secondary residence? Many Seasonally occupied Cottages are limited to a 15 Amort, the APR is much higher, and the LTV is hardly ever less than 80%. Those factors would make a big difference in what he could consider purchasing.

PS: I've had 2nd homes or vacation property in the past, and I don't recall being able to deduct the Real Estate Taxes for them . . . . I think that "Write-Off is reserved for your Primary Residence . . . . But I don't have my thumb on the pulse of the 2009 IRS today!

For the writeoffs, I was talking about the interest paid on the loan. Hinting that it would, in essence, cover the taxes.

What the site will not tell you is you will also have to pay PMI.

So, you should probably cut that price by around $15,000 to stay under $800. The amount the PMI will cost you will vary based on credit score. So will the interest rate.

In some cases you may find putting 3.5% down on an FHA loan will cost you less than a 5% down conventional. Compare both options when you select a lender to deal with.