Mortgage Prequalification Calculator Useful for Finding Real Home Loan Options

You've been watching mortgage rates, and are ready to go for a new home loan or refinance. Using mortgage calculator tools is a great way to consider and compare loans before contacting mortgage lenders. Estimating how much you are qualified to borrow provides a good basis for planning your home loan financing.

Using a Mortgage Prequalification Calculator: Information You'll Need

Assembling the information required for using a mortgage prequalification calculator can help you save time and avoid frustration. '

  • Household gross monthly income (before deductions): Add up all sources of monthly income from employment, retirement, or investments. You may also include income from other sources such as child support and disability payments, but these do not have to be included.
  • Annual percentage rate (APR): This is the cost of financing expressed as an annual percentage of the home loan or refinance amount.
  • Local property tax rate: Your real estate agent or local taxing authority Website can provide this information. This percentage is used for determining the monthly amount collected as part of your mortgage payment for paying property taxes.
  • Cash for down payment and closing: This is the amount you have available for making a down payment and covering closing costs. If you're buying a home with the assistance of a first time buyer program, this amount may include funds supplied through a state housing finance agency or other program.
  • Other monthly obligations: This is the total of monthly payments including credit cards, car payments, student loans, and family support payments paid including alimony and child support.

Enter this information into the mortgage prequalification calculator and it calculates your mortgage amount, payment amount, and estimated amounts for closing costs, mortgage and hazard insurance, and property taxes. If the resulting calculations don't suit your needs, you can plan for increasing your down payment or shop for lower priced homes.

Understanding how lenders perceive your qualifications for getting a mortgage offers a realistic picture of how much you can afford to borrow based on your income and obligations. Mortgage calculators provide general estimates based on the information supplied. Your actual mortgage quotes can vary according to individual factors such as credit scores, debt levels, and employment history.

Posted By :
Karen Lawson is a freelance writer with extensive background in mortgage banking. She holds BA and MA degrees in English from the University of Nevada, Reno.

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