225k house mortgage calculator how to#
225k house mortgage calculator plus#

Taxes. Today, it’s easy to get an idea on a home’s property taxes by looking at the listing online.

Certain loans, such as VA loans or USDA-backed loans, do not require a down payment, but there can still be reasons to make one.

Down payment. The minimum down payment for an FHA loan is 3.5 percent for conventional loans, the minimum is 3 percent for certain buyers and 5 percent for most buyers.

Those monthly expenses are up to you to manage, and cable, smartphones and a few trips to the grocery store can easily add up to several hundred dollars each month. While your mortgage lender cares about your car payments and credit card debt - and other debts you are required to pay - they really don’t care whether you have cable TV, the latest iPhone or even that you eat on a regular basis.

Note: Qualified mortgage standards allow for back-end DTIs of up to 43%, and you can change the back-end ratio the calculator uses. This is called your 'back-end' or 'bottom-end' ratio. Home affordability calculators frequently set this number at 36 percent. The other ratio involves all of your loan payments – your housing expenses (including any HOA fees, if applicable) and your total monthly debts (but not utilities or other living expenses) - divided by your gross monthly income. Most mortgage calculators set 28 percent as the desirable value for this ratio, and the front-end ratio determines how much of your monthly pre-tax income can be used for the principal and interest payment on your mortgage. One important ratio, referred to by mortgage professionals as your 'front-end' or 'top-end' ratio, is calculated by taking your proposed housing expense divided by your gross (before-tax) income. When a mortgage lender calculates your level of debt based upon how much money you make, it is known as your “debt-to-income (DTI) ratio.” Debt-to-income ratios are the province of mortgage calculators. These debts will limit how much mortgage you can borrow. Based on your income, there are limits on how much debt you'll be allowed to carry, including your mortgage.

Debt. Add all the payments you make each month for car loans, credit cards, student loan payment and any other debt.Make sure you have the documentation to prove every source of income otherwise it cannot be counted when you meet with a mortgage lender. A simple method is to divide your annual pre-tax income by 12 to produce your monthly gross income. Income. First, add up the income that will be used to qualify for the mortgage, including bonuses and commissions.The 28% and 36% ratios are standard in the mortgage world, but lenders may have other combinations available, such as 33%/38%. Generally speaking, and depending upon your location, they will typically range from about 0.5% to about 2.5% for Taxes, and 0.5% to 1% or so for Insurance.įront End and Back End debt ratios are to determine how much of your monthly gross income can be used for your mortgage debt ( front end) and how much can be used to satisfy all your regular obligations ( back end). To produce estimates, both Annual Property Taxes and Insurance are expressed here as percentages.

225k house mortgage calculator how to#

How to calculate how much house you can afford When you're ready, a lender can give you a more precise figure. Your final amount will vary depending on a number of factors, especially interest rate, which will be based on your credit score. Combine this amount with your down payment, and you'll answer your question of “how much house can I afford?” This is not the same as being preapproved for a mortgage loan, which involves borrowers placing an application and providing documentation to a lender, who will formally evaluate your financial situation. Prequalifying for a mortgage is simple, and is intended to give you a working idea of how much mortgage you can afford.

225k house mortgage calculator plus#

This final figure includes the mortgage loan’s principal and interest payments, plus taxes, insurance and any other debts you are required to repay. Generally, lenders cap the maximum amount of monthly gross income you can use toward the loan’s principal and interest payment to not more than 28% of your gross monthly income (called the 'Front-End' or 'Housing Expense' ratio) and traditionally limit your total allowable debt-to-income ratio (called the 'Back-End' ratio) to not more than 36%.