Best Online Mortgage Calculator?

AuburnTiger84 · November 2014

Hi! DH and I are just starting out on this home buying journey. I've used four different online mortgage calculators to help us get an idea of what we can afford, and I've gotten prices between $175,000 and $441,000. So I'm questioning the accuracy of some of these. I know we won't know for sure what we are able to borrow until we talk with a lender, I'm just trying to get a pretty good estimate right now, just so I can browse online and see what's out there, and what we can reasonably expect to get. Any ideas?

musictchr25 · November 2014

It's actually more important to figure out what you're comfortable paying per month rather than to go by what you will be pre-approved for.

An easy way to do this is to figure out your combined monthly income after taxes. Then deduct any regular payments that you both make, like car payments, loan payments, credit cards, etc. You will also need to budget for other things, like savings, an emergency fund, food, groceries, gas, cell phones, etc.

As a general rule, your total home budget of mortgage, insurance, PMI (if you need it), and utilities should not be more than %25 of your monthly income, typically calculated after the deductions listed above are made, that way you don't end up being house poor. The amount that you come up with would be your maximum house budget, and from there, you can figure out what amount of house you can afford by subtracting the average costs of utilities and insurance for your area, leaving you with an estimated monthly mortgage payment.

JrsyLwyr · November 2014

I like CNN Money's calculator, it lets you enter taxes, insurance, and PMI.

Sisugal · November 2014

No, No, No - STOP --- Lenders will allow you to borrow much more than is financially wise.
First you need to have a CLEAR picture of your finances - what comes in and what goes out. What you save for retirement, and that you have a good 6 moonths of expenses in an emergency fund.
Then you need to have a downpayment in hand , closing costs, moving costs, start up utility deposits, repairs/renovations, decorating/additional furniture/appliances, tools, ladders, yard items, lawn care, snow removal and patio/deck furniture/grill etc.

You do NOT WANT TO SPEND MORE THAN 25-28% of your TAKEHOME pay for your housing expenses: That means when you add all of these things - it is not more than that amount.
Mortgage+Insurance+taxes+PMI+ HOA+utilities. If you live in a HCOL area then figure on 30-35% of your takehome pay.

Consider also if you plan to finance the home based on one income or two. If you plan to have a family will you continue to work (add child care costs), stay at home (loss of income) etc.

Read - Home Buying for Dummies and Mortgages for Dummies - lots of good information and helpful tips.

Pay off consumer debt before buying. You will be glad you did.
Check you credit scores and fix any negatives.
Your mortgage interest rate will be based on your downpayment amount as well as your debt to income ration as well as your FICO score.

JCWhitey · November 2014

My personal favorite is this one as it shows you your mortgage payments but also what your total monthly payment will be with PMI, insurance, and taxes: http://www.mlcalc.com/

Play around with the numbers until you hit a "total payment" number you can afford and then base your budget off of that, not what a bank will approve you for. I actually disagree that banks will approve you for more than you can afford, there are many that are no longer doing that. We got approved for 40% of our income - expenses which is very reasonable. Lower than what I was expecting but right where we had set our budget.

Best Online Mortgage Calculator?

Re: Best Online Mortgage Calculator?

Choose Another Board

Search Boards