CNET mortgage calculator: how much home you can afford


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CNET’s Mortgage Calculator can help you determine how much home you can afford by collecting basic financial information, overlaying some regional home sales data, and calculating an estimated monthly mortgage payment. (Note that the information collected is only used to calculate your monthly payment – not for marketing or ad targeting purposes.) Keep in mind that this calculator can only provide an estimate and your actual monthly payment. (and other related costs) will depend on your specific financial situation, property, state of residence, and specific terms of your lender.

How our mortgage affordability calculator works

This calculator uses your zip code to estimate a property tax rate and your credit score to estimate a mortgage interest rate. It uses your monthly income and your current monthly debt payments to calculate the monthly payments you can afford to maintain below a target debt-to-income ratio. Finally, the calculator subtracts your other estimated monthly expenses, such as property taxes and home insurance, to determine your monthly housing budget – and the total price of the house you can afford.

The formula used is: Monthly payment = (income x DTI) – debts – tax – insurance.

How a mortgage calculator can help

A house is the biggest purchase most people make. And with the cost typically spread over 15 to 30 years, it can be difficult to determine how many homes you can afford up front. Our mortgage affordability calculator uses your financial information to make an estimate. One of the benefits of our calculator is that it takes into account monthly expenses such as property taxes and insurance, which may not be part of your monthly mortgage payment, but still contribute to your monthly housing costs. . Again, note that this calculator can only provide an estimate.

Additional costs associated with homeownership

In addition to principal, interest, taxes, and insurance (aka PITI), there are several other homeownership costs to factor into your budget.

  • Closing costs: When you close your new home, you will likely have closing costs ranging from 2% to 5% of your total mortgage amount.
  • HOA Fees: Depending on the location of your new home, you may be subject to homeowner or condo association fees each month, quarter, or year.
  • Maintenance and repairs : When you own a home, the expense of maintenance and repairs is inevitable. You will also need to factor this into your budget. Most experts recommend saving between 1% and 2% of your home’s value for annual maintenance.
  • Utility bills: Chances are, you are already paying utility bills for your current home. But remember that moving to a new home, especially if you are moving from an apartment to a house, can lead to much higher expenses for electricity, heating, natural gas and water.

Next Steps in the Home Buying Process

Once you know how much you can afford, you can start the mortgage pre-approval process and start your home search. Your lender will use more detailed information than our calculator, so your actual affordability may look a little different. And don’t forget to shop around to make sure you get the best rates available.

Home buyers glossary

When you are new to home buying, some terms may be unfamiliar to you. We’ve compiled some of the common terms associated with buying a home to help you understand the process.

APR: Your annual percentage rate is the combination of your interest rate and any lender’s charges.

Credit score: Your credit rating is essentially an assessment of your creditworthiness. It tells lenders how likely you are to pay off your loan. In general, the higher your credit score, the lower your interest rate.

DTI report: Your debt-to-income ratio is your monthly debt payments divided by your monthly income. It shows lenders what percentage of your income goes to debt each month. The highest DTI you can have on a mortgage is 43%, although most lenders prefer a DTI of 36% or less.

Advance payment: Your down payment is the amount of money you pay up front for your home, shown as a percentage of the purchase price. Most lenders require a down payment of at least 3% to 5%, although a down payment of at least 20% does not result in any private mortgage insurance.

Home insurance: Home insurance is a type of insurance to compensate you for your losses in the event of damage or destruction to your home. Most mortgage lenders require borrowers to have home insurance.

Returned: For mortgage eligibility purposes, lenders typically use your gross income, which is your income before any taxes or other deductions.

Mortgage term: The term of your mortgage is the number of years of your mortgage. Most mortgages have a term of 30 years, but you can also get a term of 15 or 20 years.

PITI: PITI represents principal, interest, taxes and insurance, the four components of your monthly housing expenses.

Property taxes: Property taxes are paid to your local government. The amount you will pay depends on the value of your home and the property tax rate in your area.

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