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Maximum Mortgage Qualification
What is your maximum mortgage you may qualify for?
That largely depends on your income and current monthly
debt payments. This calculator collects these important
variables and determines your maximum monthly housing
payment and the resulting mortgage amount.
Definitions
- Monthly income
- Total monthly income from all sources.
All income should be entered before taxes.
- Monthly housing expenses
- Your monthly houses expenses from the housing
expenses worksheet. The items entered as housing
expenses make up the taxes and insurance portion
of your monthly PITI payment.
- Monthly liabilities
- Your monthly liabilities from the liabilities
worksheet. Your monthly liabilities are used
to calculate your maximum PITI.
- Monthly housing payment (PITI)
- This is your total Principal, Interest,
Tax and Insurance (PITI) payment per month.
This includes your principal, interest, real
estate taxes, hazard insurance, association
dues or fees and principal mortgage insurance
(PMI). Maximum monthly payment (PITI) is calculated
by taking the lower of these two calculations:
- Monthly Income X 28% = monthly PITI
- Monthly Income X 36% - Other loan payments
= monthly PITI
- Maximum principal and interest (PI)
- This is your maximum monthly principal
and interest payment. It is calculated by
subtracting your monthly taxes and insurance
from your monthly PITI payment. This calculator
uses your maximum PI payment to determine
the mortgage amount that you could qualify
for.
- Start interest rates at
- The current interest rate you could receive
on your mortgage. This is used as the starting
point for displaying a range of interest rates
and the resulting mortgage amount.
- Term in years
- The number of years over which you will
repay this loan. The most common mortgage
terms are 15 years and 30 years.
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