Before you get too far in your home search, it’s important to get pre-approved for a mortgage so that you understand how much home you can afford, as well as how much you want to invest in your new home.
For a list of items needed throughout the loan process, check out Liz Moore’s Home Financing Checklist.
Mortgage Calculators
- Additional payment calculator
How much do you save by paying more or making additional payments than your initial mortgage terms? - Monthly payment calculator
Want to know how much your monthly payment is for your mortgage? - How much do I have to earn?
Not sure how much money you’ll have to earn to afford your house payment and accompanying expenses? - How much can I borrow?
Want to know how big of a mortgage you can take on? - Should I pay discount points?
Not sure if you should pay discount points on your mortgage loan? - How much will I save by refinancing my loan?
How long will it take to recoup the costs of refinancing my home mortgage? - How much will my tax deduction be?
Want to know how much your home mortgage will save you in taxes? - Bi-weekly mortgage calculator
Want to know how much time and money you’ll save paying off your loan on a bi-weekly payment plan? - APR calculator
To find out the annual percentage rate of your loan, enter the loan amount, interest rate, points, other costs
and year-length term. - Interest only monthly payment calculator
To find out the monthly savings you could gain from an interest-only payment plan.
How does a lender determine what I qualify for?
Every situation is different, but there are two big ticket items a lender needs for pre-qualification: credit score and debt-to-income ratio.
Credit Score
Your FICO credit score is the most common credit score used by lenders in determining what risk they’d take by loaning money to you. Your FICO credit scores affects both how much money will be lent and what your interest rate will be. Higher scores help you qualify for better rates – the higher the score, the less you can expect to pay for your loan.
Debt-to-Income Ratio
Your debt-to-income ratio is the percentage of income that goes towards paying debts. There are two types: front-end ratio and back-end ratio. Front-end ratio indicates the percentage of income that goes towards housing costs (rent, mortgage principle/interest, property taxes, homeowners’ association dues, etc…). Back-end ratio indicates the percentage of income that goes towards paying all recurring debt payments (credit cards, car loans, student loans, child support, alimony, legal judgments, etc…). Consult a local lender to determine how what ratio is needed for your loan.