How to Use the
Prequalification Calculator

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.

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.

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