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Want to prequalify for a mortgage? Our mortgage pre-qualification calculator shows how lenders see you. See how much you can afford based on yearly income, debts other factors. Our mortgage pre-qualification calculator will indicate how much you can borrow with a home loan by analyzing your income, assets, and current mortgage interest rates available to you.
How to use the Prequalification calculator
Enter Your Financial Information
- Gross Monthly Pay: Your household income before taxes and deductions.
- Loan Term: The number of years you’ll have to repay your mortgage.
- Annual Percentage Rate (APR): Enter the estimated mortgage interest rate (see a list of current mortgage interest rates ).
- Local Property Tax Rate: You can obtain this information from the local property tax collector’s office or website. Enter the percentage rate (not the dollar amount) in the calculator.
- Money Available for Down Payment and Closing Costs: The amount of cash you have to pay toward these expenses.
- Other Monthly Obligations: Include recurring installment payments, including credit cards, auto payments, personal and education loans.
Click the “calculate” button, and check the results.
30 Yr. Fixed – Purchase Rates from Our Lenders in California
Home Purchase or Refinance: Can You Prequalify?
- Home Value / Purchase Price: The maximum amount you prequalify for, based on the information provided.
- Total Cash Paid at Closing: The amount you’re contributing for closing costs and a down payment.
- Cash Applied to Closing Costs: An estimate of closing costs.
- Cash Applied to Down Payment: What’s left of your cash contribution is used for a down payment.
Monthly Housing Expenses
- Mortgage Payment: The amount of the principal and interest payment based on the amount you qualify to borrow and the interest rate you’ve entered.
- Property Taxes: The estimated monthly amount of property taxes. If you’re putting less than 20% down, this amount will be added to your mortgage payment.
- Mortgage Insurance: A down payment of less than 20% of the purchase price will require mortgage insurance, which will be added to your mortgage payment.
- Hazard Insurance: As with taxes and mortgage insurance, this will be added to your mortgage payment if you borrow more than 80% of your home’s purchase price.
- Total Housing Expense: This amount generally shouldn’t exceed 28% of your gross income if you want to prequalify.
- Other Monthly Expenses: The amount you entered for other monthly payment obligations.
- Total Monthly Expenses: The sum of your total monthly housing payment and other monthly expenses. It generally exceed 36% of your gross monthly income for pre-qualification purposes.
These figures are guidelines. Those with spotless credit, lots of assets, or a very stable job history might qualify for more financing. Conversely, those with credit problems or minimal assets may qualify for less. We recommend that you speak directly with lenders to determine what is right for your situation. You can request up to four free quotes from competing lenders here, with no cost and absolutely no obligation to you.
You can also compare savings on loan terms, rates and amounts using the amortization calculator. and determine potential benefits of refinancing using the refinance calculator
38 Responses to “Prequalification Calculator”
- Taylor 22, Sep, 2012
Nice. It says up to $70,000 for a mortgage loan. I’m a first time home buyer and that’s exactly what I’m looking for. $529 for total monthly expense with mortage insurance and hazard insurance for my low 4% down payment. But did not expect $2000 in closing costs. Thanks
Thanks for this tool
I have no mortgage on my property. I’m interested in getting a cash-out refinance or a home equity loan, and I’d like to know how much money will I be able to borrow, will the calculator work for that purpose, or do they have a different standard? Thanks
Excellent tool and excellent responses to the other “tools” below! Thanks so much for making this available and for your thorough responses to questions!
Okay, um the calculator says i can afford a $3,695,000 home. I entered $100,000 for annual income. How much more inacurate can this stupid thing be? – – EDITOR’S COMMENT – – _ The calculations are fine. You made a simple mistake by entering $100,000 when you should have entered $8,333 as your income. (The calculator asks for “monthly” income, not “annual” income.) I can re-create your results if I put $100,000 in monthly income, $10,000 in closing costs, and $0 in monthly expenses. Maybe you don’t have any credit cards, auto loans, bank loans, student loans or anything like that, but if you do, you need to enter all monthly financial obligations that you’ll be making payments on, in order to achieve accurate results. You can leave out irregular expenses like groceries, gas, utilities and other standard living expenses, and you can leave out any expenses that will be going away as soon as you start your new mortgage (such as rent on an apartment). But other than those types of things, lenders will factor in all your ongoing financial obligations into your prequalification calculations, so remember to include those. Please try your calculations again. I’m sure you will find that it will work well for you!
Hmmmmmm. I just did this for a kick because we received our actual prequalification letter today. This calculator pre-qualified us for $130,000 LESS than our actual prequalification and for a payment that is almost $200 below what we are currently paying for rent. Not very accurate. – – – – EDITOR’S COMMENT: Actually, the calculator is accurate, but there’s no law that says a given lender has to stick to the industry standard when deciding how much to lend you. Your lender is allowing you to stretch yourself thinner than most other lenders would feel comfortable with. Perhaps you have savings or other assets that could be converted into cash if you get into trouble, and this has raised your lender’s confidence in your ability to repay. Or perhaps you’re about to finish up a degree that will increase your employability significantly. Something has convinced the lender to lend you $130,000 more than would normally be practical. As to your other observation, the reason the calculator produced a lower payment is, of course, if you were to borrow $130,000 less, your monthly payment would be considerably lower that what your lender quoted you. Let me end with a note of friendly, cautionary advice. Borrowing as much as you possibly can is not the only path forward. If you can be happy while living below your means (finding a way to enjoy life while keeping your living expenses lower than average for your income), you will be less likely to find yourself plagued by future financial worries, you’ll be able to pay cash for items you would othewise find yourself financing (such as furniture, vacations and automobiles), you’ll be able to save more for emergencies, and you’ll be in a better position to plan for a more enjoyable retirement. Please forgive me if I am being forward in saying this. It’s just something to consider – some solid advice from my father to me, and now to you.
My wife and I would like to buy investment rental property. – – – EDITOR’S REPLY: We at Calculators4Mortgages wish you well with your investment goals. Exploring the purchase of rental property as a valuable element of your investment strategy is a good idea. While we would like to be of assistance, this site is currently geared toward people who are purchasing a home to serve as their primary residence. We would like to expand into real estate investment calculators at some point, but we have no immediate plans to do so.
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