This calculator determines your monthly payment, monthly housing expenses and bills, and three ratios the bank looks at when determining whether or not you qualify for a mortgage. These calculations are approximate, and should only be used as a guideline. Banks will differ on exactly how they use this information to qualify you for a mortgage. An LTV, or loan-to-value ratio of 80% or less is considered good; more than 80% and you'll probably be required to have private mortgage insurance (PMI). A housing ratio, or housing expenses-to-income ratio, is generally in the range of 28% or lower for a conventional mortgage, 29% to 31% for an FHA or VA mortgage, and 32% or above for a sub prime mortgage. Finally, a debt ratio, or debt-to-income ratio, is generally in the range of 38% or lower for a conventional mortgage, 39% to 41% for an FHA or VA mortgage, and 42% or above for a sub prime mortgage.
Please fill in all fields in the calculator. If a particular field does not apply to you, then enter 0 for that field. The interest rate can be entered as a whole number or a decimal, just do NOT enter the percentage sign. For example, 7.5% can be entered either as 7.5 or as .075. Both ways work. Finally, enter the monthly amount for all expenses (taxes, insurance, loan payments, dues, etc), NOT the yearly or quarterly amount.