Between the second quarter of 2020 and the second quarter of 2021, house prices in the U.S. rose 17.4%. With prices increasing, it’s more important than ever to make sure you know how much you can afford and what your home will cost.
Affordability and payment calculators can make this easier. Which one do you need? Let’s take a look at the differences so you can make an informed decision for your FHA loan Florida mortgage application.
What Is an Affordability Calculator?
An affordability calculator is meant to show you a home estimate of how much you can afford. Most affordability calculators show you the home price and total loan amount, and you may be able to add a down payment and interest rate to get a more accurate answer.
Some may also give you an estimated monthly payment. However, you should note that this monthly payment number may not be as accurate as a mortgage payment calculator.
The calculator will take your monthly income, expenses, and current debt into account in its calculations. Some may also ask you for other expenses, such as PMI, taxes, and homeowners insurance costs.
What Is a Payment Calculator?
Payment calculators help you figure out what you will pay each month towards your mortgage. In addition, many will show you the total cost of your mortgage after considering both principal and interest payments.
A payment calculator will ask you for the mortgage amount and the interest rate. You can estimate the amount and use the current average interest rates to get a good estimate. You will also need to include the mortgage period, which is the length of your FHA loan Florida mortgage.
Which Type of Calculator Do You Need?
Both affordability and payment calculators can be helpful. While they each have their own outputs, you can use them in conjunction to figure out a starting point of what you can afford and what you can expect to pay each month.
For instance, you may want to use an affordability calculator to give you a rough idea of how much home you can afford. This will make it easier to narrow down potential homes in your price range.
Then, you can use a payment calculator once you have a good idea of your mortgage amount, interest, and terms to estimate how much you should set aside each month for your housing costs.
While both calculators are helpful tools, remember that they are only estimates and may not give you exact numbers. Be sure to talk with your mortgage loan officer, as they can help you get an even better idea of what you are looking at financially.
Apply for Your FHA Loan Florida
Mortgage calculators, including payment and affordability calculators, can help figure out how much you can spend on your new home. It is essential to have a loan officer that can help walk you through the finer details of your mortgage application.
Call 7th Level Mortgage to get started with your FHA Loan Florida mortgage quote today.
7th Level Mortgage is a leading one-stop mortgage company providing deeply informed, custom-tailored assistance with each mortgage transaction phase. If you are searching for a home loan in New Jersey, Pennsylvania, Delaware, Maryland, New York, or Florida, please contact us today so that we can determine the best Mortgage Lender to place your loan with and get you the best possible rate and program.