Home Purchase Mortgage Calculators
Mortgage Program Calculators
For a $500,000 loan amount in order to qualify for a conventional mortgage (not backed by a government program), most lenders require that you have a loan-to-value (LTV) ratio of 90% or less which means that you make a down payment of at least 10%. You should be able to qualify for an FHA mortgage which allows borrowers to buy a home with a down payment as low as 3.5% of the property purchase price. Because the FHA mortgage program is backed by the government you are required to pay an up-front and ongoing monthly FHA mortgage insurance premium (MIP). There are also limits to the size of mortgage you can obtain with the FHA program and your target loan amount of $500,000 could be above the loan limit for your county. We provide a thorough overview of the FHA mortgage program as well as an FHA MORTGAGE QUALIFICATION CALCULATOR that you can use to evaluate your situation. Please note that in addition to credit card debt, lenders also include auto and student loans as well as any required alimony payments when calculating a borrower's monthly debt payments to determine what size mortgage you qualify for.
One potential option is to make a 5% down payment and get a second mortgage for 5% of the property purchase price. That way the LTV ratio for the first mortgage is 90% so you should be able to qualify for a conventional mortgage. Please note that if your LTV is greater than 80% you will likely be required to pay private mortgage insurance (PMI) which is an ongoing monthly fee in addition to your mortgage payment. You could also consider getting a second mortgage for 15% of the property purchase price would reduce the LTV ratio for the first mortgage to 80%, allowing you to avoid paying PMI. We provide an overview of how second mortgages work on FREEandCLEAR. Not all lenders offer second mortgage programs so you may need to contact multiple lenders to find ones that do.
If you decide to get a smaller mortgage and your loan amount is $484,350 or less (in most counties), there are several conventional mortgage programs that allow you to purchase a home with a down payment as low as 3% including the Fannie Mae 3% Down Payment Program, although many of these programs require you to pay PMI. We provide a comprehensive list of low and no down payment mortgage programs on FREEandCLEAR.