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Mortgage Affordability Calculator .calc-container { max-width: 800px; margin: 0 auto; font-family: -apple-system, BlinkMacSystemFont, "Segoe UI", Roboto, Helvetica, Arial, sans-serif; color: #333; line-height: 1.6; } .calc-box { background: #f8f9fa; border: 1px solid #e9ecef; border-radius: 8px; padding: 30px; box-shadow: 0 4px 6px rgba(0,0,0,0.05); margin-bottom: 40px; } .calc-grid { display: grid; grid-template-columns: 1fr 1fr; gap: 20px; } .input-group { margin-bottom: 15px; } .input-group label { display: block; font-weight: 600; margin-bottom: 5px; font-size: 0.9em; color: #495057; } .input-group input, .input-group select { width: 100%; padding: 10px; border: 1px solid #ced4da; border-radius: 4px; font-size: 16px; box-sizing: border-box; } .input-group input:focus { border-color: #007bff; outline: none; box-shadow: 0 0 0 3px rgba(0,123,255,0.1); } .calc-btn { grid-column: 1 / -1; background: #007bff; color: white; border: none; padding: 15px; font-size: 18px; font-weight: bold; border-radius: 4px; cursor: pointer; transition: background 0.2s; margin-top: 10px; width: 100%; } .calc-btn:hover { background: #0056b3; } #results-area { display: none; grid-column: 1 / -1; background: #fff; border: 2px solid #28a745; border-radius: 8px; padding: 20px; margin-top: 20px; text-align: center; } .result-main { font-size: 2.5em; font-weight: 800; color: #28a745; margin: 10px 0; } .result-sub { font-size: 1.1em; color: #6c757d; margin-bottom: 5px; } .breakdown-grid { display: grid; grid-template-columns: 1fr 1fr; gap: 15px; margin-top: 20px; border-top: 1px solid #eee; padding-top: 15px; text-align: left; } .breakdown-item span { float: right; font-weight: bold; } .content-section h2 { color: #2c3e50; margin-top: 30px; } .content-section p { margin-bottom: 15px; color: #555; } .content-section ul { margin-bottom: 20px; padding-left: 20px; } .content-section li { margin-bottom: 8px; } @media (max-width: 600px) { .calc-grid { grid-template-columns: 1fr; } .breakdown-grid { grid-template-columns: 1fr; } } .error-msg { color: #dc3545; font-weight: bold; display: none; grid-column: 1 / -1; text-align: center; } function calculateAffordability() { // Retrieve inputs var annualIncome = parseFloat(document.getElementById('annualIncome').value); var monthlyDebts = parseFloat(document.getElementById('monthlyDebts').value); var downPayment = parseFloat(document.getElementById('downPayment').value); var interestRate = parseFloat(document.getElementById('interestRate').value); var loanTerm = parseInt(document.getElementById('loanTerm').value); var propertyTaxRate = parseFloat(document.getElementById('propertyTaxRate').value); // Annual % var insuranceRate = parseFloat(document.getElementById('insuranceRate').value); // Annual % // Error handling elements var errorDiv = document.getElementById('calcError'); var resultsDiv = document.getElementById('results-area'); // Validation if (isNaN(annualIncome) || annualIncome <= 0 || isNaN(interestRate) || isNaN(loanTerm)) { errorDiv.style.display = 'block'; errorDiv.innerHTML = "Please enter valid numeric values for Income, Rate, and Term."; resultsDiv.style.display = 'none'; return; } // Handle defaults for empty optional fields if (isNaN(monthlyDebts)) monthlyDebts = 0; if (isNaN(downPayment)) downPayment = 0; if (isNaN(propertyTaxRate)) propertyTaxRate = 1.2; // Default 1.2% if (isNaN(insuranceRate)) insuranceRate = 0.5; // Default 0.5% errorDiv.style.display = 'none'; // Calculations var monthlyGrossIncome = annualIncome / 12; // 28/36 Rule Logic // 1. Front-end Ratio (28% of income for housing) var maxHousingPaymentFront = monthlyGrossIncome * 0.28; // 2. Back-end Ratio (36% of income for housing + debts) var maxTotalDebtPayment = monthlyGrossIncome * 0.36; var maxHousingPaymentBack = maxTotalDebtPayment – monthlyDebts; // The affordability limit is the lesser of the two var maxAllowableMonthlyPayment = Math.min(maxHousingPaymentFront, maxHousingPaymentBack); if (maxAllowableMonthlyPayment <= 0) { errorDiv.style.display = 'block'; errorDiv.innerHTML = "Based on your monthly debts, you currently do not qualify for a standard mortgage."; resultsDiv.style.display = 'none'; return; } // Reverse Engineering Home Price from Monthly Payment // Payment = Principal&Interest + Tax + Insurance // P&I Factor var r = (interestRate / 100) / 12; var n = loanTerm * 12; var mortgageFactor = (r * Math.pow(1 + r, n)) / (Math.pow(1 + r, n) – 1); // Tax and Insurance Monthly Factors (as decimal of home price) var taxFactorMonthly = (propertyTaxRate / 100) / 12; var insFactorMonthly = (insuranceRate / 100) / 12; var totalEscrowFactor = taxFactorMonthly + insFactorMonthly; // Formula derivation: // MaxPayment = (LoanAmount * mortgageFactor) + (HomePrice * totalEscrowFactor) // LoanAmount = HomePrice – DownPayment // MaxPayment = ((HomePrice – DownPayment) * mortgageFactor) + (HomePrice * totalEscrowFactor) // MaxPayment = (HomePrice * mortgageFactor) – (DownPayment * mortgageFactor) + (HomePrice * totalEscrowFactor) // MaxPayment + (DownPayment * mortgageFactor) = HomePrice * (mortgageFactor + totalEscrowFactor) var maxHomePrice = (maxAllowableMonthlyPayment + (downPayment * mortgageFactor)) / (mortgageFactor + totalEscrowFactor); // Final sanity checks if (maxHomePrice < 0) maxHomePrice = 0; var loanAmount = maxHomePrice – downPayment; var piPayment = loanAmount * mortgageFactor; var taxPayment = maxHomePrice * taxFactorMonthly; var insPayment = maxHomePrice * insFactorMonthly; // Formatting currency var formatter = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD', maximumFractionDigits: 0 }); // Display Results resultsDiv.style.display = 'block'; document.getElementById('resultHomePrice').innerHTML = formatter.format(maxHomePrice); document.getElementById('resultMonthly').innerHTML = formatter.format(maxAllowableMonthlyPayment); document.getElementById('resultLoan').innerHTML = formatter.format(loanAmount); document.getElementById('resultDown').innerHTML = formatter.format(downPayment); document.getElementById('resultPI').innerHTML = formatter.format(piPayment); document.getElementById('resultTax').innerHTML = formatter.format(taxPayment); document.getElementById('resultIns').innerHTML = formatter.format(insPayment); // Dynamic Text update based on limiting factor var limitReason = ""; if (maxHousingPaymentBack < maxHousingPaymentFront) { limitReason = "Limited by your existing monthly debts (Back-end Ratio)."; } else { limitReason = "Limited by your income (Front-end Ratio)."; } document.getElementById('limitReason').innerHTML = limitReason; }

House Affordability Calculator

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You can afford a home up to:
$0
Est. Monthly Payment: $0
Loan Amount: $0
Down Payment: $0
Principal & Interest: $0
Est. Property Tax: $0
Est. Insurance: $0

How Much House Can I Afford?

Purchasing a home is likely the largest financial decision you will make in your lifetime. Understanding your budget before you start looking at listings is crucial to avoid financial strain. This Mortgage Affordability Calculator uses industry-standard Debt-to-Income (DTI) ratios to provide a realistic estimate of your purchasing power.

How Is Affordability Calculated?

Lenders primarily look at two metrics when determining how much they are willing to lend you. These are known as the "Front-End" and "Back-End" ratios, often summarized as the 28/36 rule.

  • The Front-End Ratio (28%): This rule states that your monthly housing costs (principal, interest, taxes, and insurance) should not exceed 28% of your gross monthly income (your income before taxes).
  • The Back-End Ratio (36%): This takes your housing costs plus all your other monthly debt payments (credit cards, student loans, car payments) and ensures the total does not exceed 36% of your gross monthly income.

The calculator calculates both limits based on your inputs and uses the lower number to determine your maximum safe monthly payment.

Factors That Impact Your Affordability

While income is the primary driver, several other factors drastically change the price of the home you can afford:

1. Down Payment

A larger down payment reduces the loan amount required, lowering your monthly payments. Furthermore, if you put down less than 20%, you may be required to pay Private Mortgage Insurance (PMI), which reduces your buying power.

2. Interest Rates

Even a 1% difference in interest rates can change your purchasing power by tens of thousands of dollars. When rates are high, more of your monthly payment goes toward interest rather than the principal of the home.

3. Monthly Debts

Existing debts are the most common reason for reduced affordability. A $500 monthly car payment reduces your borrowing power significantly more than a $500 reduction in monthly income, because it eats directly into your "Back-End" ratio capacity.

Improving Your Buying Power

If the result from the calculator is lower than home prices in your target area, consider these strategies:

  • Pay off high-interest debt: Eliminating a monthly obligation increases your DTI capacity immediately.
  • Save for a larger down payment: This reduces the loan size and potentially removes PMI costs.
  • Shop for lower interest rates: Improving your credit score can help you qualify for better rates.

Use this tool as a starting point. Always consult with a qualified mortgage professional to get a pre-approval letter for an exact figure tailored to your specific financial situation.

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