How Much Can I Borrow?
How much money can you borrow to buy a home? Many people need an answer when they are considering buying a home to that question. What do they qualify for? This will range widely based on numerous factors, but if you want to know the answer before you call a lender to request a quote, use this tool.
This mortgage calculator can help you to determine how much you qualify to borrow based on the same information that the lender will use to calculate this information. |
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This is only an estimate. The lender will also want you to qualify based on your credit score and borrowing history. However, if you want some basic information this tool will help you to obtain that. Here is how to use the How Much Do I Qualify Calculator.
- Enter the interest rate you will pay on a loan. If a lender has quoted you a rate, list it here. Otherwise, list the interest rate that is the current average lenders offer.
- List the length of the loan. The length of the loan matters because it helps to determine how much your monthly payment will be. The longer you hold the loan, the lower your interest rate will be, but the more expensive the loan will be.
- Enter the estimated real estate taxes you will pay yearly. This information is often found on the listing of the home you are considering purchasing.
- List the annual homeowner’s insurance payment you will need to make. You can get this information from your homeowner’s insurance company, as well as from your lender (basic information may be available.)
- Enter your gross annual income, the income you are paid prior to taxes being taken out of your check.
- List your monthly debt obligations, which will include all types of debt you pay monthly including car loans, credit card debts and other monthly payments you make. Do not include utility costs here.
Hit the calculate button and you will quickly see some important figures. The maximum monthly mortgage payment you can afford is on this page. The key to remember here is that other factors, including utilities and cost of living costs are factored into this. You will then see the maximum loan amount most lenders will qualify you for.
By changing the information on the mortgage calculator, you may qualify for more or less of a loan. This will change widely based on a number of factors, such as your credit score (which will affect the interest rate) and the actual insurance and taxes paid. Consider extending or reducing the loan term, too. You may be impressed with how much of a loan you actually qualify for. |
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