How To Calculate Your Mortgage Payment

How do you calculate your mortgage payment?

The easy way: usmortgagecalculator.org

But:

First, you need to make sure that you understand the difference between the payment you can AFFORD and the payment that is COMFORTABLE.

To find what you can afford, a lender will consider your Debt To Income ratio (DTI).

They'll add all of your debt obligations (student loans, cars, credit cards, home equity lines, mortgages, etc) and add that with your proposed housing payment.

The housing payment is also called the PITI-A. It stands for Principal, Interest, Taxes, Insurance, and Association fees. And the PITI-A is the total housing expense that a lender will calculate.

(keep in mind, lenders won't calculate utilities and other home expenses, so take this into account when you're looking at how much cashflow you'll have left over every month)

A conservative estimate is a max DTI of 43%. Take your gross monthly income and multiply it time .43.

So, if you make $5,000/mo, your DTI ceiling will be $2,150.

Then, you'll want to add up the monthly payments of all debts that would show up on your credit report.

You'll want to make sure that all of your debts and housing expense combined is less than 43% DTI (this is a conservative estimate, some loan programs allow a higher DTI).

So, this helps you get an understanding of how much you can afford, but it won't help you live a thriving lifestyle.

Make sure that you consider how you want to live... do you want to invest, save, donate?

Just because you're approved for a high amount, doesn't mean you have to purchase a big house.

Keep the lifestyle you desire in mind before you take on a large housing payment each month.

If you have any questions, leave a comment below or reach out to me. I'd love to add some clarity for you!


winthehouseyoulove.com/

Kyle Seagraves
Mortgage Consultant
Motto Mortgage Alliance
NMLS# 1701021

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How To Calculate Your Mortgage Payment

1:55 What are you approved for?
6:48 What's a comfortable monthly payment for you?
9:00 How to calculate using an online tool
9:44 US Mortgage Calculator walkthrough

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Motto Mortgage Alliance
winthehouseyoulove.com/
8900 N. Dixie Dr.
Dayton, OH 45414

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