Mortgage Qualifying Calculator
When thinking about buying a home, some of the big questions are: How much can I afford? Can I afford the home I'm interested in? What will my mortgage payments be if I buy this home? This Mortgage Qualifying Calculator can give you the answers to all three.
Financial Calculators from
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Down Payment and Closing Costs:
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Total Monthly Debt Payments:
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$500 Monthly Payment Breakdown
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Total Payments: Interest $59,711, Principal $72,462
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Use of $10,000 Cash on Hand
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Your annual income before taxes. For joint applicants this is your total combined annual income before taxes.
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
Your total monthly payment, including principal, interest, taxes and insurance (often called "PITI").
Term in years
The number of years over which you will repay this loan. Common mortgage terms are 15, 20 and 30 years.
The current interest rate you expect to receive on your mortgage. Please note that the interest rate is different from the Annual Percentage Rate (APR), which includes other expenses such as mortgage insurance, and the origination fee and or point(s), which were paid when the mortgage was first originated. The APR is normally higher than the simple interest rate.
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 home owner's insurance rate. 0.5% for a $100,000 home equals $500 per year for homeowner's insurance.
Choose how the report will display your payment schedule. Annually will summarize payments and balances by year. Monthly will show every payment for the entire term.
Cash on hand
Cash you have for the down payment and all 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.
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.
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.
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.
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%.
How do I use the mortgage qualifying calculator?
The mortgage qualifying calculator allows you to calculate the amount of mortgage you may qualify for in several ways. To select how you'd like to calculate, select one of the options from the drop-downs on "Calculate for." Your options are:
- Total monthly payment: Calculates the total mortgage you may qualify for to hit a desired monthly payment.
- Annual income: Calculates the total mortgage you may qualify for based on your yearly income.
- Purchase price: Shows how much income you'd need to make to qualify for a mortgage at a specific purchase price.
How much income do I need to qualify for a home loan?
The answer to this question is dependent on a few factors. The most significant factors include loan type, annual income, debts and credit score. Input these values into our mortgage qualifying calculator, and it will bring out the maximum purchase price you may qualify for.
How much is the monthly mortgage payment can I qualify for?
Determining the monthly mortgage payment you qualify for is similar to calculating the maximum mortgage loan you can afford. All you have to do is enter the value of your annual income and the length of your loan on the mortgage qualifying calculator, and it will display the monthly payment you should expect.
Can I get a mortgage on $20k a year?
Yes, it's possible to get a mortgage on 20k a year. Assuming a loan term of 30 years with an interest rate of 5%, you may qualify for a home up to $74,066 and have a monthly payment of $467. Head on over to our mortgage qualifying calculator to determine what those amounts will be with different interest rates and loan terms.
How much mortgage can I get on $25k a year?
An income of 25 thousand dollars should leave you able to afford a house worth up to $80,000. That number could rise up to over a hundred thousand with an extended loan term. Our mortgage qualifying calculator will give you a precise maximum mortgage value for your desired loan term.
How much mortgage can I get for $500 a month?
With a total monthly payment of $500 every month for a loan term of 20 years and an interest rate of 4%, you can get a mortgage worth $72,553. Of course, this value might vary slightly, depending on the percentages of property tax and home insurance.
What mortgage can I get with a $10k down payment?
The amount of the mortgage you can afford with a $10k down payment depends on the lender and loan type. Certain loan types, such as USDA and VA loans do not require a down payment.
Can I afford a $360k house?
To afford a mortgage loan worth $360k, you would typically need to make an annual income of about $100k and be able to afford monthly payments worth $2,000 and upwards. For example, with a 30-year loan term, 5% interest rate and 5% down, you'd need an annual income exceeding $105,000 to afford the $2,478 monthly mortgage payment
How much mortgage can I afford with a joint income of $50k?
With an annual income of $50k, you will be eligible for a mortgage that is worth above $100,000 but below $250,000. Your total monthly payment will fall somewhere slightly above a thousand dollars. Of course, the exact value will vary depending on the loan term, interest rate and lender. Head on over to our calculator to punch those numbers.
Who is the mortgage qualifying calculator for?
This calculator is most useful if you:
- Are a potential homeowner needing to know your budget constraints
- Have decided on a new home but want to ensure you can afford it
- Are looking to plan and budget for the future
If you're ready to connect with a trusted lender and receive exact figures, fill out this short form here and request personalized rate quotes tailored to you. This will give you a better idea of what interest rate to expect and help gauge your ability to qualify for a mortgage.
What does the Mortgage Qualifying Calculator do?
This mortgage qualifying calculator takes all the key information for a mortgage and lets you determine any of three things: 1) How much income you need to qualify for the mortgage, or 2) How much you can borrow, or 3) what your total monthly payment will be for the loan.
To do this, the calculator considers your mortgage rate, down payment, length of the loan, closing costs, property taxes, homeowners' insurance, points you want to pay and more. You don't need to input all information to receive a ballpark figure.
You can also enter information about your current debts, like your car payments, credit cards and other loans to figure out how those affect what you can afford. This Mortgage Qualifying Calculator also gives you a breakdown of what your monthly mortgage payments will be, shows how much you'll pay in mortgage interest each month and over the life of the loan, and helps you figure how you might allocate your upfront cash on hand toward closing costs.
On top of that, it also lets you easily adjust any of the figures by using a sliding scale, making it simple to see how changing one or more affects the result, so you can identify where how reducing one thing or increasing another affects the final result.
This Mortgage Qualifying Calculator also summarizes all your information in a detailed report, including an amortization table, for easy reference.
Using the Mortgage Qualifying Calculator
The Mortgage Qualifying Calculator is designed to be easy to use and largely self-explanatory. Just fill in the various fields with the information requested. Start by choosing if you want to base the calculation on your annual income, the purchase price of the home you're looking at or the monthly payment you can afford. Then work down the page entering your other information and the calculator will figure out the other two values for you and display them in gray.
- Enter your annual income and the Mortgage Qualifying Calculator will determine the maximum purchase price you can afford and the associated monthly payment.
- Enter the purchase price and the calculator will tell you the income you need and the monthly payment required. Or,
- Enter the monthly payment you're thinking of and the Mortgage Qualifying Calculator will tell you the income needed to qualify and the home purchase price that will cover.
Then go down the rest of the page entering the information requested. Your answers will be displayed in gray at the top of the page. Click "View report" for a detailed breakdown and an amortization report.
Still have questions? Here's a step-by-step guide to lead you through it.
- Choose whether you want to calculate based on your annual income, or if you know your ideal price or monthly payment you can search by those instead.
- Choose the loan term; that is, how many years you'd like to have to repay the mortgage. Remember that shorter loans mean paying less in interest over the life of the loan, and usually a lower mortgage rate as well. But your monthly payments will be higher than on a longer loan.
- Add in the remaining details such as the interest rate you expect to get, property tax payments and homeowners's insurance premiums. If you don’t know any of these, leave the default values as these are based upon market averages.
- Select the relevant button to get a breakdown of your costs either annually or monthly. This will be reflecting in your amortization table when you view your report.
- Continue for your down payment and closing costs. Not that the Mortgage Qualifying Calculator will assume that all of your cash on hand not going toward closing costs will be used for your down payment, unless you check the box to limit your down payment to no more than 20 percent of the purchase price.
- Enter your monthly payments for any auto loans, credit cards and other loan payments.
- Click the green Calculate button to jump back to the top of the tool, which will now be displaying the estimated value of the home you are able to purchase. Click View Report for a simple graph and explanation of how the calculator came to this conclusion.
- Whatever result you get, click Get FREE Quote to explore your options further.
I'm not sure what my interest rate will be. What should I do?
Fortunately, you don't have to have a specific mortgage rate in mind to use the Mortgage Qualifying Calculator. You can choose an approximate rate, enter the rest of your information, then use the sliding tool to see how a higher or lower rate will affect your results. That includes changing your amortization table and the interest paid over the life of the loan. You can adjust other values as well to see what effect a different figure there would have.
I don't know what to enter for property taxes or homeowners' insurance.
You can leave these and most other boxes blank if you don't know what those costs might be, and the Mortgage Qualifying Calculator will generate an answer without them. The same for the inputs under Down Payment and Closing Costs, and Total Monthly Debt Payments. But your results will be more accurate and useful if you can provide these figures.
The Mortgage Qualifying Calculator says I can’t afford my dream home. What can I do?
It can be disappointing to learn that the home you have set your heart on is out of financial reach, but don’t give up hope! It may be that you can reach your goal by adjusting some of your other constraints. Perhaps you can save for a little longer in order to amass a larger down payment, or wait until your credit card and loans are paid off.
These small but significant changes could make all the difference and enable you to get the mortgage you require. If the down payment is causing you an issue, you might consider an FHA loan, which offers competitive rates while requiring only 3.5 percent down, even for borrowers with imperfect credit.
My result shows I can afford my new home. What should I do next?
First of all, congratulations! You are now one step closer to owning the home you desire. The next step is to reach out to our team of top-notch mortgage lenders and get started on securing yourself the perfect deal.
Click Get FREE Quote, and answer a few simple questions about yourself and the loan you are seeking to obtain personalized rate quotes from lenders doing business in your area. This service is totally FREE of charge and makes it easy to comparison shop for your best deal on a home loan. Take your next step today - it couldn’t be simpler!
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