Below is a basic calculator which will probably become you best friend during the mortgage process and home loan search. Sure the fancy financial mortgage calculators work great and they have lots of buttons but they come with a enormous amount of reading material in order to learn how to understand their workings. This simple calculators will become your mortgage calculator of choice, with a little qualifying scale and some basic calculations you will be as close to the real numbers as loan officers.

 Mortgage Rate / Calculator Ratio chart

 So, a basic mortgage calculators and a chart. Just try it by following this procedure. This is way the those fancy calculators compute and anyone can do it to.

Simply Procedure for turning a normal calculator into a fancy mortgage calculator and for computing how much you can afford.

The first calculation will determine how much you can buy. Take the buyer's salary, we will use $35,000 a year.
Then gather the monthly debts on credit report : minimum credit card monthly payments = $ 110 and a car payment of $190.
So take the 35,000 and divide that by 12 = 2916 then times that by 42% (42% is a safe mortgage approval guideline percentage) = $1225
Subtract the buyers monthly minimum debt 2915- 110 - 190 = 925.
Now you have to subtract from this number potential property tax and insurance 925 -120 -50-50 = 705.
There the simple mortgage calculator functioned well so far. So, the income of the buyer(s) allows for a 705 monthly principle and interest mortgage loan payment. The final calculations tell us a yearly salary of 35,000 divided into the months is $2916 and a current monthly minimum debt payments of 300.
Using 705 look at the Mortgage Rate / Calculator Ratio chart above so that you can determine the loan amount/new home sales price. If rates on the 30 year fixed rate mortgages are 6.125% and 705 is the allowable PI payment then divide 705 by 6.06 = 116,000 ( On the Mortgage Calculator Ratio Chart the Ratio Calculations for an interest rate of 6.125% is 6.06 ) This means the buyer(s) can qualify and should look for a sales price of $116,000.

Utilizing this web site is agreement  to our privacy policy. This is not an advertisement for credit as defined by paragraph 226.24 of regulation Z. There is no Mortgage rate guarantee for all applicants . This is a website and not a mortagge company. Information is not intended to be used as investment advice.