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Affordability Calculator

How much you can borrow from a lender? Use this calculator to calculate the amount you can afford from the lender's point of view.

Loan Information

Down Payment
Interest Rate
%
Length
years
Estimated Front Ratio
%
Estimated Back Ratio
%

Income Information

Debt Payment Information

Income 1
$
Auto Loans
$
Income 2
$
Student Loans
$
Income 3
$
Installment
$
Income 4
$
Revolving accts
$
Income 5
$
Other Debt
$

Taxes And Insurance Information

Annual Taxes
Annual Insurance
Annual PMI
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Monthly Principal & Interests $1,460.00
Monthly Real Estate Taxes $250.00
Monthly Insurance $125.00
Monthly PMI $192.65
Total Monthly Payments $2,027.65
Monthly Income $8,000.00
Monthly Debt Payments $910.00
Actual Front Ratio 25 %
Actual Back Ratio 37 %
Amount $271,900.00
Down Payment $30,200.00
Home Value $302,100.00

Before you start looking for a new home, you need to have an idea of how much you can afford to pay for a home. To find this out, you will need to take a closer look at your total monthly household income as well as the debts and regular monthly payments you are already making. In addition, you will need to consider how much money you can put in down payment, the loan interest rate, and the length of the loan. You will also need to have an idea of how much the taxes will be, as well as the insurance and PMI costs.

Estimated front and back ratios helps you to limit your housing and necessary living spending. Front ratio is a percentage of your gross income that you can spend on all housing related expenses, including property taxes and insurance. Back ratio is a percentage of your gross income that you can spend on your housing expenses plus recurring debt such as installment loans, revolving / CC bills, child support and or alimony etc.

Front / back ratios with values of 31/43 / 40/50 are considered conservative these days, values bigger than 45 / 52 are considered aggressive and are not recommended for use.

Using all of this information, you can determine how much you might afford to pay for your mortgage. If you are interested in making a $30,200.00 down payment and hope to get a 30 year loan with a 5.000% interest rate, you can afford to purchase a home that costs $302,100.00 if your gross household monthly income is $8,000.00 and your total monthly payments on your other bills is no more than $910.00.

If you purchase a home under these conditions, you can expect to pay $2,027.65 per month toward your mortgage. $1,460.00 of this will be toward the actual loan, while $250.00 will be toward taxes and $125.00 will be toward insurance.

DISCLAIMER: There is NO WARRANTY, expressed or implied, for the accuracy of this information or it's applicability to your financial situation. Please consult your own financial advisor.

We have many other Mortgage Calculators for you to use.

Make sure you register to receive my Free Homebuying Guide and Insider Mortgage Reports, browse my Resources section, fill-out a FREE No-Obligation Secure Online Loan Application, or call me in my Oviedo, Florida office at 321-377-4211. I am here to help you with all your mortgage needs.