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 payment schedule button to see a complete amortization
schedule of your mortgage payments.
| Definitions |
| Annual income |
Your annual income. For married couples
this is your total combined annual income. |
| 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 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 in 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 up front 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 misc. 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 your loan balance
exceeds 20% of the original purchase price, your PMI payment
drops to zero. |
| Monthly PI payment |
Monthly principal and interest payment.
|
| Total for down payment |
Total funds remaining, after closing costs,
for down payment. |
| Limit down payment to 20% |
Limit down payment to 20% of the purchase
price. Even if you have more cash on hand than required
for closing costs and a 20% down payment. |
| Show schedule by month |
Display the payment schedule by month when
you press the Payment Schedule button. |
| Show schedule by year |
Display the payment schedule by year when
you press the Payment Schedule button. |
| Total debt percent of annual income |
Not shown. This is the
percent of your annual income your financial institution
allows you to use for installment payments debt. This
includes car payments, credit card payments, other loan
payments and your "Principal, Interest, Tax and Insurance"
payment for your home. The default rate is 36%. |
| PITI percent of annual income |
Not shown. This is the percent of your annual
income your financial institution allows you to use for
your "Principal, Interest, Tax 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, Tax and Insurance"
for your home. |
