Mortgage Qualifier

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.

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Definitions

Annual incomeYour annual income. For married couples this is your total combined annual income.
Purchase priceThe price of the home you wish to purchase. This is the actual price you pay, not including any closing costs.
Total monthly paymentTotal 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 handCash you have for the downpayment and all closing costs.
Interest rateThe current interest rate you can receive on your mortgage.
Term in yearsThe number of years over which you will repay this loan.
Property tax rateYour property tax rate. 1% for a $100,000 home equals $1,000 per year in property taxes.
Home insurance rateYour homeowner's insurance rate. 0.5% for a $100,000 home equals $500 per in for homeowners insurance.
Monthly car payment(s)Total monthly payment for your car loan(s).
Credit card paymentsTotal monthly minimum payments for your credit cards.
Other loan paymentsAny other installment loan payments, such as student loans or unsecured loans.
Total closing costsTotal up front costs to close your loan. This is the total of your loan origination fee, points paid and other closing costs.
Loan origination rateThe percentage the lending institution charges for its origination fee. 1% for a $100,000 home equals $1,000.
Number of points paidThe total number of points paid to reduce the interest rate of your mortgage. Each point costs 1% of your mortgage balance.
Other closing costsEstimate of all other closing costs for this loan. This should include filing fees, appraiser fees and any other misc. fees paid.
Monthly PMI paymentMonthly 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 paymentMonthly principal and interest payment.
Total for downpaymentTotal funds remaining, after closing costs, for downpayment.
Limit downpayment to 20%Limit downpayment to 20% of the purchase price. Even if you have more cash on hand than required for closing costs and a 20% downpayment.
Show schedule by monthDisplay the payment schedule by month when you press the Payment Schedule button.
Show schedule by yearDisplay the payment schedule by year when you press the Payment Schedule button.
Total debt percent of annual incomeNot 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 incomeNot 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 amountShown 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.


information and interactive calculators are made available to you as self-help tools for your independent use. We can not and do not guarantee their accuracy or their applicability to your circumstances. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.

 

*These materials are not an offer to sell or solicitation of an offer to buy any security, nor shall any such security be offered or sold to any person, in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction.

IMPORTANT CONSUMER INFORMATION

(1) A broker-dealer, investment advisor, BD agent or IA rep may only transact business in a particular state after licensure or satisfying qualifications requirements of that state, or only if they are excluded or exempted from the state's broker-dealer, investment advisor, BD agent or IA rep requirements, as the case may be; and
(2) Follow-up, individualized responses to consumers in a particular state by broker-dealer, investment advisor, BD agent or IA rep that involve either the effecting or attempting to effect transactions in securities or the rendering of personalized investment advice for compensation, as the case may be, shall not be made without first complying with the state's broker-dealer, investment advisor, BD agent or IA rep requirements, or pursuant to an applicable state exemption or exclusion. (3) For information concerning the licensure status or disciplinary history of a broker-dealer, investment advisor, BD agent or IA rep, a consumer should contact his or her state securities law administrator.