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The Learning Center
 | Calculators
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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 "View Report" button to see a complete amortization schedule of your mortgage payments.
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- Annual income
- Your annual income. For married couples this is your total combined annual income.
- Purchase price
- The price of the home you wish to purchase. This is the actual price you pay, not including any closing costs.
- Total monthly payment
- The total 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 hand
- The cash you have for the down payment and all closing costs.
- Interest rate
- The current interest rate you can receive on your mortgage.
- Term in years
- The number of years over which you will repay this loan. The most common mortgage terms are 30 years and 15 years.
- Property tax rate
- An estimate of the property tax rate. Estimate the annual real estate taxes as a percentage of the home’s value. For example, entering 1% for a home valued at $100,000 home equals $1,000 per year in property taxes.
- Home insurance rate
- Your homeowner’s insurance rate. Estimate the home insurance as a percentage of the home’s value. For example, entering 0.3% for a $100,000 home equals $300 per year for homeowners insurance.
- Monthly car payment(s)
- The total monthly payment for your car loan(s).
- Credit card payments
- The total monthly minimum payments for your credit cards.
- Other loan payments
- Any other installment loan payments, such as student loans or unsecured loans.
- Total closing costs
- The total up-front costs to close your loan. This is the total of your loan origination fee, points paid and other closing costs.
- Loan origination rate
- This is the percentage of the new mortgage amount that is paid to the lender as the loan origination fee.
- Number of points paid
- The total number of points paid to reduce the interest rate of your mortgage. Each point costs 1% of your mortgage balance.
- Other closing costs
- Estimate of all other closing costs for this loan. This should include filing fees, appraisal fees and any other miscellaneous fees paid.
- Monthly PMI payment
- The monthly cost of private mortgage insurance (PMI). For loans secured with less than 20% down, PMI is estimated at 0.9% 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 22% of the original purchase price, your PMI payment drops to zero.
- Monthly PI payment
- Your monthly principal and interest payment.
- Total for down payment
- The total funds remaining, after closing costs, for down payment.
- Limit down payment to 20%
- Limit down payment to 20% of the purchase price. Even if you have more cash on hand than required for closing costs and a 20% down payment.
- Show schedule by month
- Displays the payment schedule by month when you press the Payment Schedule button.
- Show schedule by year
- Displays the payment schedule by year when you press the Payment Schedule button.
- Total debt percent of annual income
- This is not 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. Generally, a good rule of thumb is that your total debt percent should not exceed 36% of your income.
- PITI annual income percentage
- This is not 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. Generally, a good rule of thumb is that your total debt percent should not exceed 28% of your income.
- Qualify amount
- Shown 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.
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