Before you use this calculator for the first time, please read the instructions, which are underneath the form.
The purpose of this calculator is to allow you to compute the loan amount for which you may qualify.
The calculator tends to be conservative. If it shows that you can obtain a mortgage that is as large as you want, then many lenders probably would like to have your business. If it shows that your savings or income falls short, do not become discouraged. By contacting a lender directly, you may find that in fact you qualify for the amount you want.
The calculator finds the maximum loan amount for you, based on three constraints:
To use the calculator, fill in your income (gross income, not take-home pay), savings, and total monthly debts. Do not use commas. The calculator will interpret 10,000 as $10, and you will be very disappointed in the results!
Monthly debt payments include payments for student loans, car loans, mandatory child support and credit card payments (do not count a credit card payment if you simply pay off your balance each month without owing interest). Your current housing expenses (rent or mortgage payment) should not be included as debt here. If more than one person will be signing for the loan, total the income, savings, and monthly debts of all would-be borrowers.
For the interest rate, you may either accept the default value or type in an interest rate of your choice. If you choose to type in another value, keep in mind that for ARMs the start rate may not be the same as the rate that is used for qualification purposes. A good rule of thumb is to add 2 percentage points to the start rate on any ARM of 1-year or less. For example, a one-year ARM with a start rate of 6.0 percent might have a qualifying rate of 8.0 percent.
Also, the calculator assumes a 30-year amortization term, which is the case with most standard fixed-rates and ARMs, including the 7/23 and 5/25 balloon loans. One exception is the 15-year mortgage, for which this calculator does not apply. Monthly payments on 15-year mortgages are higher than those on 30-year mortgages (even though the interest rate typically is lower), so putting in the interest rate on a 15-year mortgage will produce misleading results.
Be sure to check whether you are entering your income as an hourly, weekly, monthly, or annual amount. When you have entered all of the data, click on calculate, and the calculator will return the loan amount for which you qualify.
To return to the form now, scroll up.
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