How Much Home Can I Afford?
Calculator

When you’re buying a home, it is important to know what to expect from mortgage lenders as they evaluate your eligibility for a home loan. Your income, assets, obligations, and liabilities are all considered carefully. Use this calculator to estimate the amount of mortgage you may be able to obtain.

Monthly Income

Monthly Gross Wages:

Monthly Investment Income:

Child Support/Alimony Income:

Other Monthly Income:

Monthly Debt Payments

Monthly Auto Payments:

Monthly Credit Card Payments:

Monthly Child Support/Alimony:

Other Monthly Debts:

Mortgage Information

Annual Interest Rate:

Loan Term:(Years)

Yearly Property Taxes:

Yearly Property Insurance:

Monthly Wages

Enter gross monthly wages before taxes and any other deductions.

Monthly Gross Investment Income

Enter monthly gross income from all investments. This includes income from equities, real estate, bonds, etc. If investment income is uneven throughout the year use a monthly average.

Monthly Child Support and Alimony Income

Enter monthly child support and/or alimony income you receive.

Other Monthly Income

Enter any other income that you receive on a regular basis.

Monthly Auto Payments

Enter your monthly auto payments. If the loan will be paid off within 10 months your mortgage lender will not count it against your overall debt and you can enter 0 for that loan.

Monthly Credit Card Payments

Enter any credit card payments you have on outstanding credit card balances. If you payoff your credit card every month you can enter 0.

Monthly Child Support & Alimony Payments

Enter any monthly child support or alimony payments you make.

Other Monthly Debts

Enter any other recurring debts that you pay monthly. Lenders are looking for ongoing obligations that you are required to make every month, such as a student loan.

Annual Interest Rate

Enter the annual interest rate that you want to use.

Loan Term

Enter the loan term. The shorter the loan term the larger your payment is going to be, but you can pay off your loan faster.

Yearly Property Taxes

Enter your estimated yearly property taxes for this mortgage. Property taxes are usually calculated as a percentage of your home's assessed value. For example, if you pay 0.5% in property taxes of the assessed value, a home assessed at $270,000 would have a yearly property tax bill of $1,350.

Yearly Property Insurance

Enter your estimated property insurance. Lenders require that you carry home owners insurance on the property to protect their investment should a catastrophic accident occur.

Results InformationResources

Home Affordability

Payment Information

Down Payment Percent:

10%

20%

Front-End Ratio Max. Payment:

Back-End Ratio Max. Payment:

Selected Payment Ratio:

Taxes & Insurance:

Mortgage Insurance Estimate:

Principal & Interest Payment:

Mortgage Information

Down Payment:

Loan Amount:

Total Home Price:

Front End Ratio Payment

The front-end ratio payment is how much of your gross (pretax) monthly income can go towards the mortgage payment. Lenders generally use 28% for mortgages with less than a 20% down payment. If you have good credit and a downpayment of 20% or more they will sometimes use 30% - 35%. For purposes of this calculation we have used 28% for a 10% down payment and 30% for a 20% down payment.

Back End Ratio Payment

The total debt-to-income, or back-end, ratio, shows how much of your gross income goes toward all of your debt obligations, including mortgage, car loans, child support and alimony, credit card bills, student loans and condominium fees. Lenders generally use 36%. For purposes of this calculation we use 36% for both a 10% down payment and a 20% down payment.

Selected Payment

Lenders use the lesser of the front end and back end ratios to determine your total monthly mortgage payment.

Taxes and Insurance

Annual property tax and insurance are used to determine your total monthly mortgage payment. The tax and insurance annual payments are proportioned over 12 months and subtracted along with mortgage insurance to determine your principal and interest payment.

Mortgage Insurance

Mortgage insurance is a policy that insures the lender against loss should the homeowner default on a mortgage. Normally, if you have a down payment of 20% or greater you do not have to pay mortgage insurance. For the purposes of this calculation we calculate estimated mortgage insurance for a down payment of 10% and use $0 for a down payment of 20%.

Principal & Interest Payment

The principal and interest payment is used to calculate your maximum loan amount. Monthly taxes, property insurance and mortgage insurance are subtracted from the lesser of the front end or back end payments to determine your principal and interest payment.

Down Payment

Down payment is the amount of cash you put towards the purchase of the house. We have calculated the maximum mortgage you can afford using down payments of 10% and 20%.

Loan Amount

The loan amount is the maximum amount of money you can borrow based on your income and debt expense.

Total Home Price

The home price is the total of your down payment and loan amount. This money would go towards the purchase of a home along with any additional closing costs.

Not a credit union member? You are probably eligible to join one. Find yours at www.CULookup.com today!

Resources

The HomeLoanLearningCenter.com provides step-by-step information on how to become financially literate.

Homeownership Preservation Foundation is an independent nonprofit that provides HUD-approved counselors dedicated to helping homeowners.

National Foundation for Credit Counseling provides high-quality financial education and counseling services for homeownership.

Send Feedback

Disclaimer

How Much Home Can I Afford?Calculator

Monthly Income

Monthly Debt Payments

Mortgage Information

Home Affordability

Resources

How Much Home Can I Afford?
Calculator