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Mortgage Calculator: Mortgage Qualifier Calculator

Mortgage shoppers taking the first step towards home ownership need to begin the process by determining how much a lender is likely to allow them to borrow for a home loan. Mortgage Marvel’s Mortgage Qualifier Calculator will guide consumers through the steps needed to figure this out.

Mortgage shoppers can simply begin the task by filling in the entry fields and clicking the "View Report" button on the Mortgage Qualifier mortgage calculator. In return, our system will produce a complete amortization schedule featuring potential mortgage payments for the maximum mortgage a lender is likely to approve.



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GLOSSARY

Annual Income
Gross yearly salary; for married couples or joint home buyers the number should reflect the combined annual income.

Purchase Price
The amount to be paid for the home, not including closing costs. Our Mortgage Qualifier mortgage calculator will automatically calculate closing costs.

Total Monthly Payment
The total monthly payment for which an individual can qualify, including principal, interest, taxes and insurance. Combined, these factors comprise the acronym PITI. The Mortgage Qualifier mortgage calculator will automatically calculate this number.

Cash on Hand
Available cash and liquid assets for the down payment and all closing costs.

Interest Rate
The rate charged to borrow a lender's money. Interest takes into account the risk and cost to the lender for a loan. The interest rate depends on the going market rate and how many discount points are paid up-front. An adjustable rate mortgage's interest is a variable rate based on the index and margin. When the term is used in conjunction with a Mortgage Marvel mortgage calculator, the term specifically applies to the annual interest rate on the mortgage.

Term in Years
The number of years it will take to repay a home loan. The most common mortgage loan term lengths are 30 years and 15 years. For balloon mortgages, the most common terms are 5 years and 7 years. After that time period concludes, individuals will need to either refinance or pay off the remaining balance. For interest only loans, consumers will have a balloon payment due for the entire principal balance at the end of the loan term.

Property Tax Rate
In relation to a Mortgage Marvel mortgage calculator, it is an estimate of the property tax rate. For calculation sake, consumers should estimate the annual real estate taxes as a percentage of the home’s value. For example, entering 1% for a home valued at $100,000 home equals $1,000 per year in property taxes.

Home Insurance Rate
An estimate of the expense for homeowner’s insurance as a percent of the home's value. For example, entering 0.3% for a $100,000 home equals $300 per year for homeowner's insurance.

Monthly Car Payment(s)
The total monthly payment amounts due on a car loan(s).

Credit Card Payments
The total monthly minimum payments due on credit card debt.

Other Loan Payments
The total of any other monthly installment loan payments, such as student loans or unsecured loans.

Total Closing Costs
The total of all the items that must be paid at closing related to a new mortgage. In relation to the Mortgage Marvel mortgage calculator, the number entered reflects the total of the loan origination fee, points paid and other closing costs.

Loan Origination Rate

This is the percentage of a new mortgage amount that is paid to the lender as the loan origination fee.

Number of Points Paid
The total number of points paid to reduce mortgage interest rates. Each point costs 1% of total mortgage balance.

Other Closing Costs
Estimate of all other closing costs for loan being calculated on a Mortgage Marvel mortgage calculator. This should include filing fees, appraisal fees and any other miscellaneous fees paid.

Monthly PMI Payment
The monthly cost of private mortgage insurance (PMI). For transactions with less than 20% down, PMI is estimated at 0.9% of the home mortgage balance each year. Monthly PMI is calculated by multiplying the starting home loan balance by this percent and dividing by 12. When a home loan balance exceeds 22% of the original purchase price, PMI payments drops to zero.

Monthly Payment (P&I)
The monthly principal and interest payment. In relation to a Mortgage Marvel mortgage calculator, the term refers to the fixed rate mortgage or the interest only mortgage payment.

Total for Down Payment

The total funds remaining, after closing costs, for down payment.

Limit Down Payment to 20 Percent
This control institutes a maximum down payment of 20 percent of the purchase price, regardless of whether there is more cash on hand than required for closing costs and a 20 percent down payment.

Show Schedule by Month
This control will display the payment schedule by month after pressing the “Payment Schedule” button.

Show Schedule by Year
This control will display the payment schedule by year after pressing the “Payment Schedule” button.

Total Debt Percent of Annual Income
This number is not shown in relation to calculations conducted in a Mortgage Marvel Mortgage Qualifier mortgage calculator. However, the number reflects the percent of an annual income used by financial institution to allow for installment payments for debt. This includes car payments, credit card payments, other loan payments and the "Principal, Interest, Tax and Insurance" payment for a home. Generally, a good rule of thumb is that the total debt percent should not exceed 36 percent of an individual’s income.

PITI Annual Income Percentage
This number is not shown in relation to calculations conducted in a Mortgage Marvel Mortgage Qualifier mortgage calculator. However, it is the percent of annual income a financial institution allows for use in regards to a PITI payment for a home. Generally, a good rule of thumb is that an individual's total debt percent should not exceed 28 percent of their income.

Qualify Amount
This number is shown as the "total monthly payment" in the Mortgage Marvel Mortgage Qualifier mortgage calculator. It is the total monthly mortgage payment for which an individual can qualify. This amount is the maximum PITI for which an individual may qualify.


Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice. We can not and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.