Mortgage Rate Calculator Illinois

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Mortgage Affordability Calculator

.calculator-container { font-family: Arial, sans-serif; border: 1px solid #ccc; padding: 20px; border-radius: 8px; max-width: 500px; margin: 20px auto; background-color: #f9f9f9; } .calculator-title { text-align: center; margin-bottom: 20px; color: #333; } .input-group { margin-bottom: 15px; display: flex; flex-direction: column; } .input-group label { margin-bottom: 5px; font-weight: bold; color: #555; } .input-group input { padding: 10px; border: 1px solid #ddd; border-radius: 4px; font-size: 1rem; } .calculate-button { display: block; width: 100%; padding: 12px; background-color: #007bff; color: white; border: none; border-radius: 4px; font-size: 1.1rem; cursor: pointer; transition: background-color 0.3s ease; } .calculate-button:hover { background-color: #0056b3; } .calculator-result { margin-top: 20px; padding: 15px; background-color: #e9ecef; border: 1px solid #ced4da; border-radius: 4px; font-size: 1.1rem; color: #333; text-align: center; } function calculateMortgageAffordability() { var annualIncome = parseFloat(document.getElementById("annualIncome").value); var existingDebt = parseFloat(document.getElementById("existingDebt").value); var downPayment = parseFloat(document.getElementById("downPayment").value); var interestRate = parseFloat(document.getElementById("interestRate").value); var loanTerm = parseFloat(document.getElementById("loanTerm").value); var resultDiv = document.getElementById("result"); if (isNaN(annualIncome) || isNaN(existingDebt) || isNaN(downPayment) || isNaN(interestRate) || isNaN(loanTerm)) { resultDiv.innerHTML = "Please enter valid numbers for all fields."; return; } if (annualIncome <= 0 || existingDebt < 0 || downPayment < 0 || interestRate <= 0 || loanTerm <= 0) { resultDiv.innerHTML = "Please enter positive values for income, interest rate, and loan term, and non-negative values for debt and down payment."; return; } // Rule of thumb: Debt-to-Income ratio (DTI) should ideally be below 36% for front-end (housing costs) // and below 43% for back-end (all debts including housing). // We'll estimate maximum monthly housing payment based on a 36% DTI. var maxMonthlyHousingPayment = (annualIncome / 12) * 0.36 – existingDebt; if (maxMonthlyHousingPayment <= 0) { resultDiv.innerHTML = "Based on your income and existing debt, you may not qualify for a new mortgage at this time. Consider increasing income or reducing debt."; return; } // Calculate maximum loan amount based on maximum monthly housing payment var monthlyInterestRate = interestRate / 100 / 12; var numberOfMonths = loanTerm * 12; // Present Value of an Annuity formula rearranged to solve for Principal (Loan Amount) // PV = PMT * [1 – (1 + r)^-n] / r var maxLoanAmount = maxMonthlyHousingPayment * (1 – Math.pow(1 + monthlyInterestRate, -numberOfMonths)) / monthlyInterestRate; // Ensure loan amount is not negative (can happen with very high interest rates or short terms relative to payment) if (maxLoanAmount < 0) { maxLoanAmount = 0; } var estimatedMaxHomePrice = maxLoanAmount + downPayment; resultDiv.innerHTML = "Your estimated maximum affordable home price is: $" + estimatedMaxHomePrice.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,') + "" + "Estimated maximum loan amount: $" + maxLoanAmount.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,') + "" + "(Based on a 36% front-end DTI ratio, excluding property taxes, insurance, and HOA fees)"; }

Understanding Mortgage Affordability

Determining how much house you can afford is a crucial step in the home-buying process. While lenders will give you a pre-approval amount, it's wise to understand the factors that influence your true affordability. This calculator helps you estimate your maximum home price based on common financial guidelines.

Key Factors Explained:

  • Annual Gross Income: This is your total income before taxes and deductions. Lenders use this as the primary basis for determining how much you can borrow.
  • Monthly Debt Payments: This includes all your recurring monthly financial obligations, such as student loans, car payments, personal loans, and minimum credit card payments. These debts impact how much of your income is available for a mortgage.
  • Down Payment: The upfront amount you pay towards the home purchase. A larger down payment reduces the loan amount needed and can lower your monthly payments and overall interest paid.
  • Estimated Annual Interest Rate: This is the annual percentage rate you expect to pay on your mortgage. Even a small difference in interest rates can significantly impact your monthly payment and the total cost of your loan over time.
  • Loan Term (Years): The duration over which you will repay the mortgage. Common terms are 15 or 30 years. Longer terms mean lower monthly payments but more interest paid overall.

How the Calculator Works:

This calculator uses a common guideline for mortgage affordability: the Debt-to-Income (DTI) ratio. Specifically, it focuses on the "front-end" DTI, which considers housing costs (principal, interest, taxes, and insurance – PITI) as a percentage of your gross monthly income. A widely accepted recommendation is to keep your total housing costs below 36% of your gross monthly income.

The calculator first calculates your maximum allowable monthly housing payment by taking 36% of your gross monthly income and subtracting your existing monthly debt payments. It then uses a mortgage payment formula (the present value of an annuity) to determine the maximum loan amount you could afford with that monthly payment, given your specified interest rate and loan term. Finally, it adds your down payment to this maximum loan amount to estimate your total affordable home price.

Important Note: This is an estimate. It does not include property taxes, homeowner's insurance, or potential Homeowners Association (HOA) fees, which are part of your total monthly housing cost (PITI). Lenders will have their own specific criteria, and your credit score, loan type, and other factors will also play a role.

Example Calculation:

Let's say you have:

  • Annual Gross Income: $90,000
  • Monthly Debt Payments: $400 (student loan)
  • Down Payment: $25,000
  • Estimated Annual Interest Rate: 6.8%
  • Loan Term: 30 years

Your gross monthly income is $90,000 / 12 = $7,500.
The maximum monthly housing payment (front-end DTI of 36%) would be approximately $7,500 * 0.36 = $2,700.
Subtracting your existing debt ($400), leaves $2,700 – $400 = $2,300 for your maximum monthly mortgage payment (P&I only).
Using a 30-year term and 6.8% interest, a $2,300 monthly payment supports a loan of roughly $350,000.
Adding your $25,000 down payment, your estimated maximum affordable home price is approximately $375,000.

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