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Mortgage Qualification Calculator Help

Use this calculator to help you determine the most expensive house you would qualify for. Enter your monthly income, all monthly debt expenses (credit card payments, car payments, loan payments, and any other expenses), and information about your mortgage (down payment amount, loan term, interest rate, property tax rate, private mortgage insurance (PMI), and monthly association dues). This calculator will then show you the highest monthly payment you can afford and the highest priced home you can afford to keep your total monthly housing expenses less than 28% and your debt ratio less than 36% of your total gross monthly income. In general, most lenders do not want your total monthly housing expenses (including property taxes, private mortgage insurance (PMI), and association dues) to exceed 28% of your total gross monthly income. And your total debt ratio cannot exceed 36% of your total gross monthly income.

Input Fields:

Title A title for these calculator results that will help you identify it if you have printed out several versions of the calculator.

Monthly Income

Gross Monthly Salary/Income Normal monthly income, including taxes, but not including alimony, child support, etc.
Other Monthly Income Other monthly income such as alimony or child support.

Monthly Expenses

Car Payments The total amount you spend each month for all car payments.
Credit Card Payments The total amount you spend each month for all credit card payments.
Other Loan Payments The total amount you spend each month for all loans (not to include mortgage).
Other Fixed Montly Expenses Total of all other monthly obligations you have. (Examples are alimony, child support, legal judgment.)

Mortgage Information

Down Payment The amount of money you plan to put as a down payment on your property.
Interest Rate The annual percentage rate you will pay for this loan.
Length of Loan How long you will pay on this loan. Also choose whether 'Length of Loan' is years or months.

Anticipated Mortgage Escrow Expenses

Annual Property Tax Rate The percentage of your home's value that your local government charges annually for property taxes.
Homeowner's Insurance The likely amount you will pay for homeowner's insurance on a property valued around the price shown as 'Qualifying Home Value'. Also choose whether this is the amount you will pay per year or month.
Private Mortgage Insurance The likely amount you will pay for private mortgage insurance (PMI) on a loan around the amount shown as 'Likely Loan Amount'. (You will probably pay private mortgage insurance if you borrow at least 80% of your property's value.) Also choose whether this is the amount you will pay per year or month.
Association Dues (if any) Any Homeowner's Association dues you will owe as part of your property's Covenants and Restrictions (CCRs). Also choose whether this is the amount you will pay per year or month.
Other Escrow Any other escrow charges (not property taxes, homeowner's insurance, private mortgage insurance (PMI), or association dues since those are entered individually) that will be paid with your monthly mortgage. (If you're borrowing more that 80% of the home's value you'll likely pay PMI.) One example might be Special Service District (SSD) charges. Also choose whether this is the amount you will pay per year or month.

Output Fields:

Total Monthly Income Total amount of 'Monthly Income' entered.
Total Monthly Expenses Total amount of 'Monthly Expenses' entered.

Monthly Mortgage Payment Breakdown

Principal & Interest The portion of 'Likely Max Monthly Mortgage' (shown in the next section) that represents your monthly principal & interest payment.
Property Taxes The portion of 'Likely Max Monthly Mortgage' (shown in the next section) that represents your monthly property tax payment.
Homeowner's Insurance The portion of 'Likely Max Monthly Mortgage' (shown in the next section) that represents your monthly homeowner's insurance payment. If 'Homeowner's Insurance' expense (in the section above) is per 'Year', this will be calculated as 'Homeowner's Insurance' / 12 to get the monthly amount.
Private Mortgage Insurance The portion of 'Likely Max Monthly Mortgage' (shown in the next section) that represents your monthly private mortgage insurance (PMI) payment. If 'Private Mortgage Insurance' expense (in the section above) is per 'Year', this will be calculated as 'Private Mortgage Insurance' / 12 to get the monthly amount.
Association Dues The portion of 'Likely Max Monthly Mortgage' (shown in the next section) that represents your monthly homeowner's association dues payment. If 'Association Dues' expense (in the section above) is per Year, this will be calculated as 'Association Dues' / 12 to get the monthly amount.
Other Escrow The portion of 'Likely Max Monthly Mortgage' (shown in the next section) that represents your other monthly escrow payment. If 'Other Escrow' expense (in the section above) is per 'Year', this will be calculated as 'Other Escrow' / 12 to get the monthly amount.

Qualification Calculations

Likely Max Monthly Mortgage Based on your monthly expenses, down payment, anticipated interest rate and mortgage escrow expenses, your monthly mortgage payment should be at most this amount.
Housing Debt Ratio The percentage of your monthly income that goes to pay for housing.
Total Debt Ratio The percentage of your monthly income that goes to pay all your debt (including housing).
Likely Loan Amount A mortgage lender will likely finance about this amount for you. This amount is calculated on either your 'Housing Debt Ratio' reaching the maximum 28% or your 'Total Debt Ratio' reaching the maximum 36%.
Qualifying Home Value You should be looking to buy a home or property valued at this or less. This amount is simply the 'Likely Loan Amount' + 'Down Payment' amounts.

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All calculators are made available as self-help tools for your independent use with results based on information provided by the user. All examples are hypothetical and are for illustrative purposes only. Calculated results are believed to be accurate but results are not guaranteed. Mortgage calculator results are based upon conventional program guidelines. Other loan programs are available. Further review by a professional is necessary to obtain exact and complete information and available options for your personal circumstances.
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Updated 04 Jul 2007