FHA Mortgage Calculator | How much mortgage can I afford?

How much mortgage can I afford?

With the recent increase in the FHA loan limits, people may see this as the time to think about purchasing a house. Before they begin the application process, they can estimate about how much of a monthly payment they would be required to pay with a monthly mortgage calculator.

In order to use a FHA mortgage calculator, people first need to verify what their counties' FHA loan limits are. Once that is completed, it is important to determine which FHA mortgage insurance bracket your mortgage will require on the upfront scale and annual scale. With the new mortgage insurance rules in place, the upfront insurance premium will likely equal one percent of the loan amount and the annual premium will be set by the scale listed below.

After those steps are complete, the FHA loan calculator will require:

The down payment percentage: FHA loans require a minimum 3.5 percent down for home purchase transactions or a minimum home equity requirement of 2.25% for no cash-out refinancing mortgages. A minimum of 15% equity is required for a cash-out FHA loan refinance.

The base loan amount: The down payment or home equity requirement subtracted from the purchase price of the house (or appraised value for refinance).

The amount of the upfront FHA mortgage insurance premium: Equal to one percent of the loan amount must be added in manually.

The final loan amount and payments: The original mortgage amount plus the upfront mortgage insurance premium, annual mortgage insurance, taxes and homeowners insurance.

All these borrowers will have to do is click the calculate button on the monthly mortgage calculator, and they will get an estimate on what they will pay each month. The monthly mortgage calculator will give borrowers three pieces of information: One is the amount of the monthly principle plus the interest paid, the second will be how much the borrower will pay every month with taxes and insurance and the third will be the total amount of payments for the life of the loan.

What are the current premiums on FHA Mortgage Insurance?

FHA Upfront Mortgage Insurance Premium (MIP): FHA charges an upfront premium equal to the following amount:

Purchase, Refinance and Streamline Mortgages = 1 Percent

FHA Annual Mortgage Insurance Premiums: Annual premiums, listed in basis points, are also charged on a monthly basis based on the loan-to-value ratio and mortgage term length:

LTV	Loans >15 Years	LTV	Loans < 15 Years
< 95%	.110	< 90%	None
> 95%	.115	> 90%	.50

What are the income requirements for an FHA Loan?

Borrowers must also be able to meet two qualifications before they will be approved for their loans; their income before taxes must be more than 28 percent of the amount they will be paying for their mortgages and taxes, and their income before taxes must also be more than 35 percent of the amount they pay for mortgage, taxes and all their other debts each month.

About FHA Loan Limits

View FHA Loan Limits for your area.

Higher FHA Loan Limits Extended

Loans backed by the Federal Housing Administration (FHA) have many advantages for buyers over other loan types, but potential homeowners should be aware that FHA loan limits 2012 will remain at the higher levels that were set in 2008 for single unit properties. FHA mortgage limits are $271,050 for homes in lower price ranges. The new FHA loan limits extension is not expected to have an impact on many people, only those who were interested in purchasing homes in higher cost areas, up to $729,750,which was the the previous FHA limits on new mortgages.

The FHA loan limits 2012 are also subject to FHA county loan limits. The FHA limits that are imposed are determined by the average selling price of other homes in the same county where the home buyer is considering purchasing a home. The FHA county loan limits are also determined by the square feet of the house in question. The number of units in a particular piece of property is also a factor in coming up with FHA mortgage limits. A single family home will have a FHA loan limit that is approximately half of a rental property with four units.

After a future homeowner determines his or her FHA loan limit, there are four different types of loans available. These are adjustable rate, fixed rate, purchase FHA loans and refinance FHA loans. With the adjustable rate, payments and interest tends to be the lowest at the beginning of the mortgage loan when people are usually younger and have lower incomes. As the loan matures, the payments may change. This can be avoided by taking on a fixed rate FHA loan instead. The purchase FHA loan is available in every state and is subject to county loan limits. Refinance loans are for the purpose of tapping into the home's equity to lower the payment, consolidate debt or finance other major purchases.