How to Use the Prequalify Calculator
Make a more informed decision by finding out how much house you can afford based on your yearly income, your debts and other factors, with our Mortgage Prequalification Calculator.
A mortgage pre-qualification calculator can indicate how much you can borrow with a home loan by analyzing your income, assets, and current mortgage interest rates available to you.
Enter Your Financial Information
- Gross Monthly Pay: Your household income before taxes and deductions.
- Loan Term: The number of years you'll have to repay your mortgage.
- Annual Percentage Rate (APR): Enter the estimated mortgage interest rate.
- Local Property Tax Rate: You can obtain this information from the local property tax collector's office or website. Enter the percentage rate (not the dollar amount) in the calculator.
- Money Available for Down Payment and Closing Costs: The amount of cash you have to pay toward these expenses.
- Other Monthly Obligations: Include recurring installment payments, including credit cards, auto payments, personal and education loans.
Click the "calculate" button, and check the results.
Home Purchase or Refinance: Can You Prequalify?
- Home Value / Purchase Price: The maximum amount you prequalify for, based on the information provided.
- Total Cash Paid at Closing: The amount you're contributing for closing costs and a down payment.
- Cash Applied to Closing Costs: An estimate of closing costs.
- Cash Applied to Down Payment: What's left of your cash contribution is used for a down payment.
Monthly Housing Expenses
- Mortgage Payment: The amount of the principal and interest payment based on the amount you qualify to borrow and the interest rate you've entered.
- Property Taxes: The estimated monthly amount of property taxes. If you're putting less than 20% down, this amount will be added to your mortgage payment.
- Mortgage Insurance: A down payment of less than 20% of the purchase price will require mortgage insurance, which will be added to your mortgage payment.
- Hazard Insurance: As with taxes and mortgage insurance, this will be added to your mortgage payment if you borrow more than 80% of your home's purchase price.
- Total Housing Expense: This amount generally shouldn't exceed 28% of your gross income if you want to prequalify.
- Other Monthly Expenses: The amount you entered for other monthly payment obligations.
- Total Monthly Expenses: The sum of your total monthly housing payment and other monthly expenses. It generally exceed 36% of your gross monthly income for pre-qualification purposes.
These figures are guidelines. Those with spotless credit, lots of assets, or a very stable job history might qualify for more financing. Conversely, those with credit problems or minimal assets may qualify for less. We recommend that you speak directly with lenders to determine what is right for your situation. You can request up to four free quotes from competing lenders here, with no cost and absolutely no obligation to you.
You can also compare savings on loan terms, rates and amounts using the amortization calculator, and determine potential benefits of refinancing using the refinance calculator.