Home Affordability Calculator

Understanding how much home you can afford is an important first step in the homebuying process. It can help you know how much your mortgage loan will be approved for and it may help influence where you buy, when you buy and what kind of home mortgage loan you apply for.

Home Affordability Calculator

Use the Home Loan Express Mortgage Home Affordability Calculator to get an idea of how much you may be able to borrow for your home mortgage loan. After you crunch the numbers, if you like what you see, you can start the pre-qualification process and start the homebuying process.

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Legal Disclosures

30-year Fixed-Rate Loan:

The payment on a $247,000 30-year Fixed-Rate Loan at 2.99% (3.406% APR) is $1,110.02 for the cost of 2.125 point(s) due at closing and a loan-to-value (LTV) of 92.51%. One point is equal to one percent of your loan amount. Payment does not include taxes and insurance. The actual payment amount will be greater. Some state and county maximum loan amount restrictions may apply.

15-year Fixed-Rate Loan:

The payment on a $247,000 15-year Fixed-Rate Loan at 2.375% (2.858% APR) is $1,677.76 for the cost of 1.875 point(s) due at closing and a loan-to-value (LTV) of 92.51%. One point is equal to one percent of your loan amount. Payment does not include taxes and insurance. The actual payment amount will be greater. Some state and county maximum loan amount restrictions may apply.

30-year Fixed-Rate VA Loan:

Rate is fixed. The payment on a $247,000, 30-year fixed-rate loan at 2.49% and 92.51% loan-to-value (LTV) is $974.67 with 2.125 Points due at closing. The Annual Percentage Rate (APR) is 2.874%. Payment does not include taxes and insurance premiums. The actual payment amount will be greater. Some state and county maximum loan amount restrictions may apply. VA loans do not require PMI. The VA loan is a benefit of military service and only offered to veterans, surviving spouses and active duty military.

FHA Loan: Rate is fixed.

The payment on a $247,000, 30-year fixed rate loan at 2.375% and 92.51% loan-to-value (LTV) is $1,122.91 with 2.125 Points due at closing. Payment includes a one time upfront mortgage insurance premium (MIP) at 1.75% of the base loan amount and a monthly MIP calculated at 0.8% of the base loan amount. For mortgages with a loan-to-value (LTV) ratio of 92.51%, the 0.8% monthly MIP will be paid for the first 30 years of the mortgage term, or the end of the mortgage term, whichever comes first. Thereafter, the monthly loan payment will consist of equal monthly principal and interest payments only until the end of the loan. Payment does not include taxes and insurance premiums. The actual payment amount will be greater. Some state and county maximum loan amount restrictions may apply. The Annual Percentage Rate (APR) is 3.619%. Assumptions Lenders calculate rates using assumptions: basic loan details. For all rates shown, unless otherwise noted, we assumed: • You’re buying or refinancing a single-family home that’s your primary residence. • If refinancing, you’re not taking cash out. • Closing costs will be paid up front, not rolled into the loan. • Your debt-to-income ratio is less than 30%. • Your credit score is over 720, or 740 for certain jumbo loan options. • You’ll have an escrow account for payment of taxes and insurance. Disclosures • Mortgage rates can change daily. • Some loan options may not be available in all states. • Some jumbo loan options may not be available to first-time home buyers. • Lending services may not be available in all areas. • Some restrictions may apply. • The rate lock period is 45 days.

Assumptions

Lenders calculate rates using assumptions: basic loan details. For all rates shown, unless otherwise noted, we assumed:
You’re buying or refinancing a single-family home that’s your primary residence.
If refinancing, you’re not taking cash out.
Closing costs will be paid up front, not rolled into the loan.
Your debt-to-income ratio is less than 30%.
Your credit score is over 720, or 740 for certain jumbo loan options.
You’ll have an escrow account for payment of taxes and insurance.

Disclosures

Mortgage rates can change daily.
Some loan options may not be available in all states.
Some jumbo loan options may not be available to first-time home buyers.
Lending services may not be available in all areas.
Some restrictions may apply.
The rate lock period is 45 days.

Several factors are used when calculating how much house you can afford: household income, existing monthly debt payments such as school loans or car payments, and how much you have saved for your down payment.

Total Savings

You will also want to have a solid amount saved for emergencies - generally about three months of budgeted mortgage payments - in reserve should an expected event occur. Even if your household income and costs are relatively the same every month, emergencies can impact your ability to pay and it’s important to have additional savings set aside apart from the cash you plan to use for your purchase.

Debt-to-Income (DTI) ratio

Another important element of understanding how much home you can afford is your debt-to-income (DTI) ratio. This is calculated using your total monthly debt payments to the amount you take in before taxes.

Many lenders recommend your housing expenses shouldn’t be more than 25%-30% of your monthly income. For example, if you budget your monthly mortgage payment, with taxes and insurance, at $1,260 a month and you have a monthly income of $4,500 before taxes, your DTI is 28%. (1260 / 4500 = 0.28)

You can also flip the equation to find what your housing budget should be by multiplying your income by 0.28. In the above example, that would allow a mortgage payment of $1,260 to achieve a 28% DTI. (4500 X 0.28 = 1,260)

Loan Program or Loan Type

Your loan program will also affect how much home you can afford. If you’re a member of the armed forces, you may qualify for lower rates, lower fees, zero down payment and relaxed qualifications that can help you find a home you can afford without stretching your savings with a VA home loan.

As a first home homeowner, you may be eligible for an FHA loan, which is a government-backed home loan distributed by private lenders. FHA loans often offer low down payment requirements and loan closing costs, making this loan program an attractive option for qualifying homebuyers.

Credit Worthiness

How well you manage credit is reflected in your credit score and is one of the most important factors in determining your interest rate and loan approval.

Interest Rate

Your interest rate is the percentage of your loan the lender charges a borrower for taking out a loan. Typically, the higher your credit score or the lower the term, the better the interest rate. However, many factors such as market rates, taxes and fees can all affect your interest rate as well.

When you’re ready to purchase your new home, contact a Home Loan Express loan specialist to get you a competitive rate.

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For questions or comments about your home loan discount, call 1(866) 331-0880 or email

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The Department of Financial and Professional Regulation (Department) evaluates our performance in meeting the financial services needs of this community, including the needs of low-income to moderate-income households. The Department takes this evaluation into account when deciding on certain applications submitted by us for approval by the Department. Your involvement is encouraged. You may obtain a copy of our evaluation. You may also submit signed, written comments about our performance in meeting community financial services needs to the Department

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