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Are you a first time homebuyer or someone who has not owned a home in the last three years? Then, an FHA loan will be the ideal choice for you. Insured by the FHA and offered by the FHA lenders, an FHA loan has lenient requirements. But before you use this loan, you need to know how much home you can afford with an FHA loan. This is where the importance of an FHA home loan calculator comes.
But how to use an FHA loan calculator Texas? What are the inputs to enter? Well, you can use the calculator online by simply putting some inputs. Here are the inputs to give –
- Down payment
Down payment is the primary amount that you need to pay to the lender when you buy a home on credit. FHA requires at least a 3.5% down payment to get approval for the loan program. But the higher the down payment the better it would be for you. Save the down payment amount yourself. Or it can come from a down payment gift or you can check whether you are eligible down payment assistance program.
- Interest rate
The interest rate is the rate of interest that you have to pay for the loan over the life. To ensure the best mortgage rate, ask for quotes from different lenders. And then compare the rates and then pick the one, who offers the best rate based on your situation.
- Principal and interest
This is the amount that goes toward paying off the home loan balance along with the mortgage that you have to pay in each month. It remains the same for the life of the loan when you choose fixed-rate loan.
- FHA mortgage insurance
FHA requires a monthly fee. And it is not like private mortgage insurance. Familiar as FHA Mortgage Insurance Premium (MIP), this fee is a kind of insurance. It protects lenders against in case the home buyer fails to make the payment. Generally, the FHA MIP rate is 0.85%, however, it can vary based on your loan amount and down payment.
- Property tax
The country or the area in which the home is located charges a certain amount per year in taxes. The cost is split into 12 installments and collected each month with your mortgage payments. Your lender will collect the fee because if property taxes are not paid on time, the country can seize the home. An online FHA calculator guesses property taxes and then provides you with the result.
Are you buying a condo or a home in a Planned Unit Development (PUD)? Then, you might need to pay homeowners association (HOA) dues. When determining your ratios, the lenders focus on this cost. You may need to put-in other home-related fees, but don’t add things like utility costs.
Now go online to check various FHA mortgage loan calculators and use one before applying for an FHA home loan program. So, what to wait for? Check today!