Mortgage Affordability Calculator

Mortgage Affordability Calculator

Mortgage Affordability CalculatorThe How much house can I afford calculator is also known as Mortgage Affordability Calculator. This is a free tool that allows you to gauge what amount you can afford to purchase a house. This calculator takes your monthly income and monthly debt obligations to calculate the price of a property that you will be able to afford, based on the required figures.

They are a great way to plan your budget for a property and then look for deals that best work for you.

Factors that influence mortgage affordability

Income: You have to enter your total monthly income, pre-tax, which is the first and most important piece of information used in the calculation.

Debts: This section includes any debts you might owe, excluding federal taxes. It can be student loans, credit card payments, insurance, etc. This amount is also important in consideration of what you can afford in a mortgage for a new property.

Down payment: How much down payment you can make on a property goes a long way. Usually, conventional mortgages require a 20% down payment but it is possible to find deals where you can pay less. However, keep in mind that if the down payment is less than 20% then you will be required to get Private Mortgage Insurance.

Interest rate and Loan term: Interest rates are a percentage applied to your total loan amount and have to be paid on a monthly basis, it is usually included in the monthly payment amount that you are asked to pay.

Your loan term is the number of years you have to repay your mortgage. Usually, this period can range between 10 to 30 years depending on the mortgage plan.