However, what are the inputs that you should give a mortgage loan calculator Texas? Here are the ones –
- Home price
Home price is the initial input that you will need to enter into the online tool. It is based on your income, credit score, down payment savings, monthly debt payment, and credit score. A percentage you may hear when buying a property is the 36% rule. According to the rule, you should aim for a debt-to-income (DTI) ratio of around 36% or less than that when applying for a home loan. The ratio helps your lender understand your financial capacity to pay your mortgage each month. The higher the ratio, the less likely is that you can afford the mortgage. In order to calculate your monthly debt payments, incorporate all your monthly debt payments, such as student loans, credit card debts, auto loans, etc. Then, divide by your monthly pre-tax income. And to get a percentage, multiple it by 100 and the number you are left with is your DTI.
- Down payment
Your down payment is the primary payment to the lender when you buy a home on credit. Generally, with a traditional home loan program, the down payment requirement is 20%, while with an FHA loan, the minimum requirement is 3.5%, and with a VA, there is a no down payment requirement. Generally, you should try to save 20% of your desired home price before you apply for a home loan program. When you come with decent down payment, you would have better chances of getting the approval early. Your credit score and income are two additional factors that play a key role in determining your mortgage rate.
- Mortgage rate
It is the rate of interest that you have to pay over the life of the loan. You can use the interest rate a lender gave you when you went through the pre-approval process. If you are completely unaware of what you would qualify for, you can use an estimated rate that you found on various online sites.
- Loan term
There are various loan terms to choose from. You can choose a 30-year fixed-rate mortgage, 15-year fixed-rate mortgage, or 5/1 ARM. As the name indicates, the first two options are fixed-rate mortgage. It means your interest rate and monthly payments will be the same over the life of the loan. On the other hand, an ARM or adjustable-rate mortgage has an interest rate that will change after an initial fixed-rate period. Pick the right loan term and enter it into the calculator.
So, give these inputs into the online mortgage calculators and know your home loan affordability.
