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Which
is your maximum mortgage? That depends mainly on your income
and current monthly payments of debt. This computer gathers
these significant variables and determines your maximum monthly
payment of housing and the quantity resulting from mortgage.
Definitions
Monthly
income
Total
monthly income from all sources. All income should be entered
before taxes.
Monthly
housing expenses
Your
monthly houses expenses from the housing expenses worksheet.
The items entered as housing expenses make up the taxes and
insurance portion of your monthly PITI payment.
Monthly
liabilities
Your
monthly liabilities from the liabilities worksheet. Your monthly
liabilities are used to calculate your maximum PITI.
Monthly
housing payment (PITI)
This
is your total Principal, Interest, Tax and Insurance (PITI)
payment per month. This includes your principal, interest,
real estate taxes, hazard insurance, association dues or fees
and principal mortgage insurance (PMI). Maximum monthly payment
(PITI) is calculated by taking the lower of these two calculations:
- Monthly
Income X 28% = monthly
-
PITI Monthly Income X 36% - Other loan payments = monthly
PITI
Maximum
principal and interest (PI)
This
is your maximum monthly principal and interest payment. It
is calculated by subtracting your monthly taxes and insurance
from your monthly PITI payment. This calculator uses your
maximum PI payment to determine the mortgage amount that you
could qualify for.
Start
interest rates at
The
current interest rate you could receive on your mortgage.
This is used as the starting point for displaying a range
of interest rates and the resulting mortgage amount.
Term
in years
The
number of years over which you will repay this loan. The most
common mortgage terms are 15 years and 30 years.
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