Mortgage Prequalification Calculator
Use our Mortgage Prequalification Calculator to estimate how much you might be able to borrow for a home loan based on your annual income, monthly debt payments, loan term, and interest rate. This tool will give you a preliminary estimate of your borrowing potential, helping you understand what you can afford before you start shopping for homes.
How to Use This Calculator
- Enter your annual income before taxes in the "Annual Income" field.
- Enter your total monthly debt payments (such as credit cards, car loans, etc.) in the "Monthly Debt Payments" field.
- Specify the loan term in years (e.g., 30 years) in the "Loan Term" field.
- Input the expected interest rate for your mortgage in the "Interest Rate" field.
- Click the "Calculate" button to see your prequalification results.
Once you have your prequalified loan amount, the next step is to figure out your Debt-to-Income (DTI) ratio. This ratio compares your monthly debt payments to your monthly income and is a crucial factor in mortgage approval. A lower DTI ratio indicates a better balance between debt and income.
Prequalification Results
Debt-to-Income (DTI) Calculator
To calculate your DTI ratio, input your monthly debt payments and monthly gross income below:
DTI Calculation Results
Acceptable DTI Ranges by Lenders
- FHA Loans: Maximum DTI is typically 43%, but can go up to 50% in some cases. Loan limits: $621,000 for Broward, Miami-Dade, and Palm Beach counties.
- VA Loans: Preferred DTI is 41%, but higher DTI ratios can be approved with compensating factors. No loan limits for borrowers with full entitlement.
- Conventional Loans: Typically, the maximum DTI is 45%, but can go up to 50% with strong credit and financial reserves. Loan limits:
- 1-unit: $766,550
- 2-unit: $981,500
- 3-unit: $1,186,350
- 4-unit: $1,474,400
- Jumbo Loans: Any loan amount exceeding the conforming loan limit for the respective property type.
- USDA Loans: Loan limits vary based on county and household income. It's best to check with a USDA-approved lender for the most up-to-date information.
High-Cost Areas in Florida
While Broward, Miami-Dade, and Palm Beach counties are not officially classified as high-cost areas by the FHFA, the FHA has higher loan limits for these counties due to the higher cost of living. Other high-cost areas in Florida with even higher FHA loan limits include Monroe County (Florida Keys) and Collier County (Naples).
