Mortgage Qualifier
The first step in buying a house is determining your budget.
This calculator steps you through the process of finding out how
much you can borrow. Fill in the entry fields and click on the
"View Report" button to see a complete amortization schedule of
your mortgage payments.
Definitions
- Annual income
- Your annual income before taxes. For married couples this is
your total combined annual income before taxes.
- Purchase price
- The price of the home you wish to purchase. This is the actual
price you'll pay, not including any closing costs.
- Total monthly payment
- Total monthly payment that you can qualify for. This is the
total of principal, interest, taxes and insurance paid each month,
often called PITI.
- Cash on hand
- Cash you have for the down payment and all closing costs.
- Interest rate
- The current annual interest rate you can receive on your
mortgage.
- Term in years
- The number of years over which you will repay this loan. The
most common mortgage terms are 15 years and 30 years.
- Property tax rate
- Your property tax rate. 1% for a $100,000 home equals $1,000
per year in property taxes.
- Home insurance rate
- Your homeowner's insurance rate. 0.5% for a $100,000 home
equals $500 per year for homeowner's insurance.
- Monthly car payment(s)
- Total monthly payment for your car loan(s).
- Credit card payments
- Total monthly minimum payments for your credit cards.
- Other loan payments
- Any other installment loan payments, such as student loans or
unsecured loans.
- Total closing costs
- Total upfront costs to close your loan. This is the total of
your loan origination fee, points paid and other closing
costs.
- Loan origination rate
- The percentage the lending institution charges for its
origination fee. 1% for a $100,000 home equals $1,000.
- Number of points paid
- The total number of points paid to reduce the interest rate of
your mortgage. Each point costs 1% of your mortgage balance.
- Other closing costs
- Estimate of all other closing costs for this loan. This should
include filing fees, appraiser fees and any other miscellaneous
fees paid.
- Monthly PMI payment
- Monthly cost of Principal Mortgage Insurance (PMI). For loans
secured with less than 20% down, PMI is estimated at 0.5% of your
loan balance each year. Monthly PMI is calculated by multiplying
your starting loan balance by this percent and dividing by 12. When
the equity in your home exceeds the percentage required for PMI,
your PMI payment drops to zero. Please note that this is only an
estimate of your actual PMI. The amount you may be required to pay
may be higher or lower than our estimate.
- Monthly PI payment
- Monthly principal and interest payment.
- Total for down payment
- Total funds remaining, after closing costs, for down
payment.
- Limit down payment
- Limit your down payment to percentage required to eliminate the
need for PMI payments. Even if you have more cash on hand than
required for closing costs, checking this box will limit your down
payment to the minimum amount required to forego PMI.
- Show schedule by month
- Display the payment schedule by month when you press the "View
Report" button.
- Show schedule by year
- Display the payment schedule by year when you press the "View
Report" button.
- Total annual income debt percentage
- Not shown. This is the percentage of your annual income your
financial institution allows you to use for debt installment
payments. This includes car payments, credit card payments, other
loan payments and your principal, interest, taxes and insurance
payment for your home. The default rate is 36%.
- PITI annual income percentage
- Not shown. This is the percentage of your annual income your
financial institution allows you to use for your principal,
interest, taxes and insurance payment for your home. The default
rate is 28%.
- Qualify amount
- Shown as "Total monthly payment." This is the total amount you
qualify for per month. This amount is the total of principal,
interest, taxes and insurance for your home.
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