LInMI
LIF Adult
Member since 7/10 1802 total posts
Name:
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Mortgage Calculator Tools
Has anyone used a mortgage calculator to see how much they can afford? If so, was the $ amount close to what you were pre-approved for?
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BabyBeans
LIF Adult
Member since 3/07 930 total posts
Name:
Melissa
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Re: Mortgage Calculator Tools
no you are usually pre-approved for a lot more than you can afford. the mortgage cal is good for checking what your payments will be w/ taxes, insurance etc. then you can use that number and see if that is feasible for you after your cell phone, car pymt all those type of bills, the mortage company doesnt count any of that into when getting someone approved.
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Re: Mortgage Calculator Tools
The preapproval is really just what the bank will lend you.
Affordability really comes down to the monthly payment. So you really need to figure out what your monthly outlay will be at various price points to find your comfort zone.
Monthly payment is made up of mortgage payment, as well as taxes and insurance.
The mortgage calculator can give you a rough idea of what your mortgage payment will be, but you have to know (roughly) what interest rate you qualify for. Also, if pmi will factor in (and from your other post, it will, since you don't have 20% down), you need to realize that the mortgage calculator doesn't account for that -- or at least the ones I've seen online don't.
So it's more accurate to speak to a knowledgeable mortgage professional and have them run the numbers for you. A lot of my clients will call their mortgage bankers before making an offer to have them run the numbers on the house - giving the mortgage loan officer the taxes and estimated purchase price. Then, based on their personal situation, the loan officer can calculate what the monthly payment would be. It really gives people comfort that they know they are not stretching themselves beyond what they can do.
Also, taxes are a huge variable, so if a client tells me they can do $400K with $10K in taxes, if a house is priced at $399K but has $14K taxes, I know that house is out of their range. And vice-versa, lower taxes can mean higher price point. Even insurance is a fairly variable cost. I usually tell clients to figure $125/month in homeowners, but if someone lives in a flood zone, for example, it will be a higher cost.
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