MyFico facilitates mortgage prequalification Calculators which can calculate a series of possible monthly mortgage payments for the two possible scenarios of aggressive and conservative underwriting guidelines. The calculator generally includes the lower of the two ratios ie, payment-income ratio (housing ratio) and debt-income ratio (debt ratio). This calculator helps the people in deciding an optimum payment plan which can cater to their needs and income constraints.
The mortgage pre-qualification calculator helps you to plan your payments and also helps in selecting an optimum plan. The range is calculated on the basis of the down payments, the more the down payment the less you will have to repay. The payment amounts are shown as per the level of principal and the interest element included in the monthly payment. The representation is also given in the form of graphs which show the loan amount which you will be able to qualify. The debt content in your salary and the amount of loan which can be taken shares an inverse relationship ie, the more debt content in your monthly payments the lower the amount you can obtain as loan. The options are also expressed in graphical format which also shows the inverse relationship between the monthly income and the amount of loan which can be borrowed.
The mortgage pre-qualification calculator from MyFico takes into account many factors like other incomes, any loan liabilities that are deducted from the income, information about credit card payments etc. The calculator also asks for the preferred interest rate, term and the desired down payment for the loan. Factors like expected yearly property tax and yearly property insurance is also taken into consideration along with the calculation. The results of the calculation are expressed in three sections, the first section shows a conservative estimate which usually comes into help if the economy is weak and loans are not readily forwarded. The second section is an aggressive estimate where the economy is strong and loans are readily available. The third section shows the future monthly payment towards the loan repayment.
To conclude the Mortgage Pre-qualification calculator helps a loan applicant to know his loan eligibility based in his income and other relevant factors. This helps the people in easily planning their expenses and availing the maximum amount of loan that they can get and also helps them in knowing the various options regarding the loans which they can avail.