Mortgage affordability calculator. A mortgage payment calculator is the first thing most people search for when considering refinancing a mortgage, or buying a new home. Using a mortgage calculator, you can apply today's interest rate to the amount of your new mortgage, and find out what your new monthly mortgage payment will be. You can easily find a mortgage payment calculator online. For example, there are free mortgage calculators on several sites, which allow you to enter the interest rate, the term of the mortgage, and the mortgage principal amount, in order to calculate your new monthly payment. Use the mortgage calculator to make sure your new mortgage is affordable.
Here's some more detail about the 2 ratios Front Ratio: This ratio gives you an idea of what percentage of your gross monthly income goes towards the total monthly house payment including mortgage and any other housing cost. It is calculated by dividing the total payment on all your debts (including house payment and other debt obligations) by the gross monthly income. The standard ratio preferred is 36%.
An example on how to find out if you can afford a mortgage
Let's say that you need a loan amount of $100,000 for a period of 10 years. The mortgage rate = 6.5%, Annual property tax = $1500, Using How much house can I afford Calculator, you get: Monthly mortgage payment (principal + interest) = $ 1135.48
Total monthly debt payment = 5260.48
The monthly income that you require for mortgage payoff = 15029.94
The above calculation implies that if your monthly income is around $15029 or even more, only then you'll be able to afford a mortgage amount worth 100,000 for a repayment period of 10 years.
Related Post :