You can find an FHA mortgage calculator on many different websites, but if you do not know how to make the most out of them, they might seem useless to you. Before you ignore this helpful tool, consider the different ways that it may help you whether you are just getting started with the idea of becoming a homeowner or if you are in the trenches and are trying to find a home to purchase. Of course, everyone should make sure that the calculator they are using is valid in order to provide you with the most accurate information and you should always double check everything that you determine online with a “real” lender to ensure that what you found out was right.
Getting the Information you Need
Before you can start using a mortgage calculator, you need to gather some important information. Without this information, you will not be able to get an accurate answer. The reason that you want to use the calculator will help to determine your exact needs, but here are a few things you should gather up to get the best answer:
- Amount of your income on an annual basis (Take the total amount you make and divide it by 12)
- Amount of your outstanding debt on a monthly payment basis (Credit card payments just need the minimums in order to qualify)
- Your credit score
- The approximate price of the home you wish to purchase (you can estimate if you have not started shopping)
- The approximate amount of the real estate taxes
- The approximate amount of the homeowner’s insurance
- The amount of the down payment you wish to put down
- The length of the mortgage term you wish to take on
With this information in hand, you can then start on the journey to getting the answers you need.
What FHA Loan Amount could you Obtain?
This is probably one of the most common questions coming from any potential borrower – they want to know how large of a loan they can obtain. This is not always the best way to go about things, but if you have a burning need to know your maximum loan amount, you could use an FHA mortgage calculator to figure it out. This information is greatly based on your salary, debts, credit score, and the term you wish to have for your mortgage. When you put this information into the calculator, it will give you the maximum loan amount you would be eligible to receive. This is not to say that this is the amount of money you should borrow – it is the amount that you qualify for, but you should give careful thought as to what you can actually afford based on your personal situation.
What can you Afford?
A different question is how much of a mortgage can you afford? An FHA mortgage calculator can help you to determine that amount as well. This calculation will be a little more reasonable. It will take into account your monthly obligations, your income, and your credit score. It will give you a mortgage payment along with the loan amount. You can then make adjustments as you see fit, especially if you are not comfortable with the payment that came back at you. This is why the online calculators are so great because they can give you a head’s up on what type of payment you would be looking at. Sure, it might sound great to be able to qualify for a $250,000 loan, but when that monthly payment is put in front of you, it might quickly get overwhelming, which is why knowing what you are getting yourself into ahead of time can be a good idea.
What is my Monthly FHA Mortgage Payment?
Just like the calculation to determine what you can afford, the FHA mortgage calculator that provides you with the FHA payment that you will have on a particular loan can help you determine if a house you are thinking about purchasing is right for you. When you put in the loan amount that you need to purchase a house, along with the other necessary information, such as the real estate taxes and homeowner’s insurance costs, you will get an accurate FHA payment for today’s rates. Of course, that number could change drastically based on when you actually lock in the interest rate or if you change the amount of money you put down, but it will give you a rough idea of how much you could afford or what you are comfortable taking on. Just because you can afford something does not mean that you have to take it – if the payment seems too high to you, it is okay to go back to the drawing board.
If you discounted the necessity of an FHA mortgage calculator, you might want to give it another shot. This tool can help you stay informed before you ever go see a lender. Of course, you should not rely only on the information provided by the calculator; you should talk to a lender as well to confirm your findings. But it will help to point you in the right direction when it comes to applying for a loan. If you are just starting out, the loan calculator can really help you get a handle on what it would be like to have a mortgage payment. When you learn the amount of the payment on any given loan, you can see how it would fit into your monthly budget. If you are uneasy about taking on that type of payment, it is safe to say that you should try to change things around a little bit in order to make the payment less stressful for you. A lender will be able to walk you through the process and help you find the loan that is right for you.
Justin McHood is America's Mortgage Commentator and has been providing expert mortgage analysis for over 10 years.