The first step in the mortgage process is “pre-qualification.” A mortgage pre- qualification simply gives you an informal estimate of how much house you can actually afford and gives you a ballpark figure on how much money a lender might loan you. Getting pre-qualified for a mortgage is typically a pretty simple process.
A mortgage calculator provides you with some great starting information that will be useful when you begin talking to potential mortgage lenders. You will need to input your gross monthly income, along with the annual percentage rate and the loan term you would like to obtain.
Go to the website of your county treasurer to determine your local property tax rate. Enter that figure, the amount you have saved up for a down payment and your expected Closing Costs.
Honestly consider your other monthly obligations and include all:
- credit cards
- car loans
- insurance premiums [health, life, disability, etc.]
- student loan payments
- any other recurring loan payments
- alimony and/or child support, if applicable
The mortgage calculator will then provide you with the maximum loan amount for which you could possibly qualify.