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Mortgage Qualification Calculator

Mortgage Qualification Calculator

Calculator developed by

Use our Mortgage Qualification Calculator to determine what size mortgage you qualify for based on your monthly gross income and debt expenses. Many factors affect what size mortgage you can afford including your credit profile, interest rate, loan type and length. We recommend that you evaluate multiple scenarios to understand the mortgage amount, monthly payment and total housing expense you can afford based on your personal and financial profile.

Watch our Mortgage Qualification Calculator "How To" video

Inputs

Indicates how frequently you are paid
Please Select How Often Are You Paid
Your income per pay period before subtracting taxes and other deductions
Please Enter Net Income Per Pay Period
It looks like you may have inputted your annual income instead of your monthly net income. Please confirm you have inputted the correct net income amount.
X
Total of monthly payments for all non-housing related debt such as credit card, auto and student loans
Please Enter Total Monthly Debt Payments
It looks like you may have inputted your total debt balance instead of your total monthly debt payments. Please confirm you have inputted your total monthly debt payments.
X
The current interest rate for a 30 year fixed rate mortgage is approximately 4.125%
Please Select Interest Rate($)
The length, in years, of the mortgage. The most common mortgage term is 30 years
Please Select Mortgage Term (Years)
Also known as HOA fee, all condo complexes and some housing projects charge property owners monthly fees for insurance and upkeep of the property
Please Select Monthly Homeowners Association Fee
Amount of HOA fee paid monthly
Please Enter Amount of Monthly Homeowners Association Fee
The type of mortgage your looking to obtain
Please Select Mortgage Type
Submit Valid Info to Compare Lenders and Save Money!When you provide valid personal info we may connect you with lenders which enables you to compare mortgage proposals and find the mortgage that is right for you. Click calculator for a version of this calculator that does not require personal info
 
Please Enter Your First & Last Name
Please Enter a Valid First Name
Please Enter a Valid Last Name
 
Please Enter Your Phone Number
Please Enter a Valid Phone
Please Enter Your Email
Please Enter a Valid Email
Your credit score to the best of your knowledge
Please Select Credit Score

Outputs

The output provided represents an estimate only. Property tax and insurance rates vary by state, county and property

How Our Mortgage Qualification Calculator Works

Our Mortgage Qualification Calculator uses your monthly gross income and debt payments to determine what size mortgage you qualify for based on current interest rates and the length of your loan. Our calculator uses the following inputs:

Gross Income. Our calculator uses your monthly gross income, which is your income before any deductions such as taxes or social security, to determine what size mortgage you can afford.  The higher your gross income, the larger the mortgage you qualify for.

Monthly Debt Payments.  This figure includes payments for credit cards as well as car, student and personal loans but excludes your current housing expense. Please input your monthly debt payment and not your current loan balance. For example if you pay $250 per month on a credit card with a $5,000 balance, you input $250 in your total monthly debt payments field. The higher your monthly debt payments, the lower the mortgage you qualify for.

Mortgage Rate.  The lower the interest rate, the higher the loan amount you qualify for.

Mortgage Term.  The longer your loan, the lower your monthly payment and higher the mortgage amount you qualify for.

Our Mortgage Qualification Calculator enables you to understand the following outputs:

Estimated Mortgage Amount You Qualify For.  Understand the mortgage you can afford based on your income, debt and other factors.  Even a small change in your inputs can have a significant impact on mortgage qualification.

Mortgage Payment.  Determine your monthly loan payment based on the mortgage amount you qualify for, current interest rates and the length of your loan.

Estimated Property Tax and Insurance.  In addition to your mortgage payment, it is important to consider other expenses such as property tax and homeowners insurance.  These costs vary based on property value and location.

Total Monthly Housing Expense.  This figure includes your mortgage payment plus estimated property tax and homeowners insurance.  Use our calculator to understand the total monthly housing expense that you are comfortable with based on your financial budget.

Key Mortgage Qualification Requirements

1

Credit Score

Your credit score is one of the most important factors that determines your ability to qualify for a mortgage.  Lenders typically require borrowers to have a minimum credit score of 620 although certain mortgage programs permit lower scores.  Additionally, the higher your credit score, the lower your mortgage rate and the lower your credit score, the higher your mortgage rate.  You can use our mortgage qualification calculator to understand how your mortgage rate impacts what size loan you can afford.  Borrowers should check their credit score six-to-twelve months before applying for a mortgage to identify and address any issue in their credit profile.

2

Debt-to-Income Ratio

Your debt-to-income ratio represents the maximum amount of your monthly gross income that you can spend on total monthly housing expense (mortgage payment plus property tax, homeowners insurance and other applicable housing expenses) plus monthly debt payments such as auto, student and credit card loans.  Lenders typically apply a maximum borrower debt-to-income ratio of 43% to 50% to determine what size mortgage you qualify for, although some lenders and mortgage programs apply higher or lower ratios.  Borrowers seeking to maximize their mortgage amount may want to pay down their monthly debt before applying for a mortgage to improve their debt-to-income ratio.  Our mortgage qualification calculator applies a debt-to-income ratio to determine what size mortgage you can afford.

3

Employment History

Lenders usually require that borrowers have two years of continuous employment history before you apply for a mortgage, unless you recently graduated from college.  Additionally, if you have changed jobs recently and your new job has an initial probation period the lender may wait until the end of the probation period before approving you for a mortgage.  Finally, self-employed borrowers are usually required to provide additional documentation and some lenders may not offer mortgages to self-employed borrowers.  Please note that lenders have discretion over how they apply the borrowers employment history guideline.

4

Residence History

Lenders also require that borrower provide two years of residence history when you apply for a mortgage.  Your residence history includes properties that you have lived in that you have both owned and rented.  If you have not owned or rented a home prior to applying for a mortgage (for example if you were living with a relative) it can be challenging to qualify for a mortgage.  Borrowers should be sure to understand a lenders residence history requirement before applying for a mortgage.

5

Down Payment

Lenders usually require borrowers to make a down payment of 10% to 20% of the property purchase price to qualify for a mortgage, although there are several mortgage programs that enable you to buy a home with a low or no down payment.  Saving money for a down payment is one of the biggest challenges to buying a home even for borrowers with good credit scores and steady jobs.  In addition to making a down payment borrowers are also required to pay mortgage closing costs and potentially hold savings in reserve when the mortgage closes so borrowers need to make sure they have enough money to meet the lender's down payment and other qualification requirements.

6

Loan Program

The loan program you select also impacts how much mortgage you qualify for.  For example, the initial monthly payments for an adjustable rate mortgage (ARM) or interest only loan are usually lower than for a fixed rate mortgage.  The lower payment means that you can afford a higher mortgage amount, although ARMs and interest only loans involve more risk than a fixed rate loan because your payment can potentially increase significantly.  Interest rates also vary by loan program and you can use our mortgage qualification calculator to see what size loan you qualify for with different programs.

7

Additional Housing Expenses

There is more to mortgage qualification than just the payment you can afford based on your income and debt expenses.  Lenders also consider cost items such as property taxes and hazard insurance to assess what size mortgage you can afford.  Additionally, if you are buying a condominium or co-op that requires you to pay monthly dues then these fees are considered an additional monthly debt expense by the lender, which reduces the mortgage amount you qualify for.  Borrowers should be sure to factor in all potential housing expenses -- including mortgage insurance -- to determine the loan amount they can afford.

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Current Mortgage Rates as of February 16, 2019
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Data provided by Informa Research Services. Payments do not include amounts for taxes and insurance premiums. Click for more information on rates and product details.
While we pride ourselves on the quality and breadth of the FREEandCLEAR mortgage calculators please note that they should be used for informational purposes only. Our calculators rely on assumptions by us and inputs and assumptions provided by you, which may be inaccurate. The outputs from our calculators are estimates only and should not be used as the sole basis for making any financial decisions. Always consult multiple financial professionals when determining the mortgage size and program that is appropriate for you.

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Sources

Mortgage Affordability: https://www.consumerfinance.gov/about-us/blog/mortgage-moves-how-much-can-you-afford/

About the calculator developer

Harry Jensen, Mortgage Expert

Harry is the co-founder of FREEandCLEAR. He is a mortgage expert with over 45 years of industry experience. Over his career, Harry has closed thousands of loans for satisfied borrowers and now offers his advice and insights on FREEandCLEAR. More about Harry

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