Mortgage Income Calculator
Taking out a mortgage for a new home is one of the best decisions a person can make and the first step in becoming a homeowner. However, it is only understandable to be attracted to all the mortgage deals and beautiful houses. The question you ultimately have to ask yourself is, “Can I afford it?”
That is where Qualified Income or Mortgage Income calculators come in handy. These are free tools available to calculate the amount of monthly income you need to judge whether you can afford a certain property and mortgage plan. It can also be used to calculate your budget for a property based on your income so you can look for a property that fits that budget.
What information does a mortgage income calculator require?
The calculator requires you to enter the following information:
Property price: This will be the price of the property that you are considering for purchase.
Down payment: You will enter the max down payment you can afford to pay on the property.
Interest rate: This will be the interest rate applicable on the mortgage plan.
Loan Length: This will be the full term of your mortgage in years.
The front and back ratio: You don’t have to enter this information as it is lender specific. These are ratios of your monthly income, your monthly debt, and the total price for the property. They are a standard part of the calculations.
Once all the required sections have been filled out, the calculator will present a breakdown of how much income is required on a monthly basis to afford the property, along with a breakdown of other fees and payments that would be estimated for the calculation. This provides borrowers with a wider picture of budgeting for a property.