Mortgage Qualifier Calculator

The first step in buying a house is determining your budget. The mortgage qualifier calculator steps you through the process of finding out how much you can borrow. You can calculate your mortgage qualification based on income, purchase price or total monthly payment.

By changing any value in the following form fields, calculated values are immediately provided for displayed output values. Click the view report button to see all of your results.

Definitions

Annual income

Your annual income before taxes. For joint applicants 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

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.

Interest rate

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.

Report amortization

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%.