March 22, 2016
One of the most common questions about FHA loans is, “How much can I borrow?” The answer to that question is a lot easier to get by using an online mortgage calculator to factor in the length or term of the loan, interest rate (estimated), estimated property taxes and other details.
Some of the information you need to calculate how much you can borrow depends on circumstances. The interest rate, for example, is determined in part by what rates are on offer currently based on market conditions and other factors but also by your credit history and FICO scores.
The better your FICO scores are, the better the interest rates. The borrower and the lender negotiate interest rates on FHA mortgages, they are not set or regulated by the FHA itself.
Another example of variables to keep in mind is the amount of certain debts such as your car payment, hazard insurance and the amount of any “other income” that may qualify as a verifiable part of your monthly earnings (or be used as a compensating factor).
By adding all of this information with the online calculator you will arrive at the following results:
–An estimated maximum mortgage payment
–Estimated taxes and insurance on the loan
–Estimated MIP insurance payment
–Total estimated loan amount
The numbers you get by using the online mortgage loan calculator should be taken as an estimate to help you plan the loan and decide how you should proceed with budgeting, down payment amounts, etc.
The calculator does not arrive at exact figures or help you determine if you are qualified for a mortgage loan with a specific lender. But it is an excellent planning tool, especially for those who aren’t sure how much of a down payment they might need when purchasing the home. FHA loan rules require a minimum 3.5% down payment, so you can approximate how much money down you will need by doing the math based on the maximum loan amount estimate the online calculator provides.
Do you work in residential real estate? You should know about the free tool offered by FHA.com. It is designed especially for real estate websites; a widget that displays FHA loan limits for the counties serviced by those sites. It is simple to spend a few seconds customizing the state, counties, and widget size for the tool; you can copy the code and paste it into your website with ease. Get yours today:
http://www.fha.com/fha_loan_limits_widget
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
Browse by Date: