Mortgage Prequalification Estimate Calculator

How to Use This Mortgage Prequalification Calculator

To estimate the amount you may qualify to borrow, input the following information:

1. Loan term: Use the dropdown to select a loan term of 10, 15, 20, 25 or 30 years.
2. Interest rate: You can use our current mortgage interest rates as estimates. Be sure to enter the interest rate, not the annual percentage rate (APR).
3. Down payment: Enter your estimated down payment.
4. Annual income: Enter your pretax annual income.
5. Monthly debt payments: Input your total monthly recurring debt payments, including credit cards, auto loans, student loans, child support and personal loans. Use the minimum payment for credit cards.
6. Annual property tax: You may be able to estimate your annual property taxes by looking up the tax rate in the area where you want to buy a home. Multiply the tax rate by your home price, not your loan amount. Real estate websites or your real estate agent may also have property tax estimates.
7. Annual homeowners insurance: Lenders typically require home insurance when you have a mortgage. Your real estate agent, real estate websites, insurance websites or insurance brokers can provide an estimated annual homeowners insurance premium for the type of home you plan to buy.
8. Monthly HOA: Enter any monthly homeowners association (HOA) dues for the home you plan to buy. You can typically get this information from property listings or your real estate agent.

Lenders typically prefer a maximum back-end debt-to-income ratio (DTI) of no more than 36% to 43% for a conventional mortgage (the lower, the better). This ratio compares your gross monthly income to your monthly debt payments, including housing costs. At a 36% or lower DTI ratio, your mortgage takes up less of your monthly income; at a 43% DTI or higher, it takes up more.

When you click the Calculate button, you'll see results for both DTI ratios side by side.

• Total loan amount: The loan amount you're likely to be prequalified for
• Monthly mortgage payment: Your monthly mortgage payment for that loan, including principal and interest
• Total monthly payment: Your monthly housing payment, including principal, interest, taxes and insurance (PITI) and any HOA dues
• Total mortgage paid: The total amount of principal and interest you'll pay over the life of the loan
• Total interest paid: The total amount of interest you'll pay over the life of the loan

Learn more: Complete Costs of Buying a Home

Compare mortgage rates

Check today’s rates to find the best loan offers. Staying updated on current rates helps you secure a competitive mortgage and save more over time.

What's the Difference Between Prequalification and Preapproval?

Mortgage prequalification is an optional step that provides a general estimate of how much home you can afford. Preapproval, on the other hand, is required and provides a more accurate estimate of your borrowing power and loan terms. Here's a closer look at the key differences between the two.

Prequalification

Prequalification involves answering a few questions and providing self-reported information about your finances. The lender may also run a soft credit check, which doesn't impact your credit scores. Based on your information, the lender gives you a rough idea of how much you may qualify to borrow and an estimated interest rate.

You don't have to get prequalified for a mortgage, but it can be a good first step if you're considering buying a home. Prequalification provides a general idea of your budget so you can narrow down your home search to affordable properties or take actions that might help you qualify for a larger loan.

Preapproval

Preapproval is required when buying a home; it involves a more thorough examination of your finances. As when applying for a mortgage, you'll typically need to show the lender proof of income, bank statements, tax returns and other documentation of your finances; there may be a fee as well.

After reviewing your documentation and performing a hard inquiry into your credit report, the lender will give you a preapproval letter that estimates your maximum loan amount, interest rate and fees. A preapproval letter is typically good for 30 to 90 days.

Tip: A preapproval letter doesn't guarantee you'll be approved for a mortgage—but in a competitive housing market, it can give you an advantage over buyers who haven't been preapproved.

Learn more: Prequalified vs. Preapproved: What's the Difference?

Does Mortgage Prequalification Affect Your Credit Score?

Getting prequalified for a mortgage typically won't affect your credit score. Prequalification usually involves a soft inquiry into your credit report. Soft inquiries appear on your credit report but don't impact your credit score.

Getting preapproved for a mortgage, on the other hand, generally involves a hard credit check, which can cause a small, temporary dip in your credit score. You can help minimize negative effects on your credit score by completing all your preapproval applications within a two-week period. Credit scoring models consider hard inquiries within this time frame as one inquiry, which lessens the impact on your credit score.

Learn more: How to Get the Best Mortgage Rate

Factors That Affect Your Mortgage Prequalification

Factors that affect the mortgage amount you can prequalify for include the following:

• Credit score: Lenders consider your credit score a good indicator of whether you'll pay your mortgage on time. Depending on the type of mortgage you want, you may need a minimum credit score of 500 to 700 to get approved. Conventional mortgages generally require a credit score of at least 620; higher credit scores may qualify you for a larger loan and lower interest rate.
• Down payment: A larger down payment can help qualify you for a lower interest rate and a wider range of mortgage types. A down payment of 20% or more also eliminates private mortgage insurance, which could help you afford a pricier home.
• Loan term: Shorter loan terms generally mean higher monthly payments; this may reduce the amount you can borrow.
• Debt-to-income ratio: Lenders use your DTI to determine how much house you can afford. Reducing your DTI, which you can do by paying down credit cards and loans, could help you qualify for a larger mortgage.
• Employment: A history of steady employment gives lenders confidence you'll be able to make your mortgage payments. You may have more difficulty getting prequalified if you've recently started a new job, have changed jobs frequently or are self-employed.

Learn more: How to Build Credit to Buy a House

How to Prequalify for a Mortgage

Follow these steps to prequalify for a mortgage.

1. Collect financial documentation. Gathering proof of your income and assets, such as W-2 forms, pay stubs, bank statements and account numbers and investment account statements, will help lenders give you accurate information. You should also have a general idea of how much you want to borrow and the amount of your down payment.
2. Check your credit. Before a lender conducts a soft credit check, it's a good idea to review your credit report and score. You can check your Experian credit report and FICO^® Score^Θ for free from Experian anytime, and get free credit reports from TransUnion and Equifax at AnnualCreditReport.com weekly. Review your credit reports to ensure the information is complete and accurate. If you find information you believe is inaccurate, you have the right to file a dispute with the appropriate credit reporting agency.
3. Apply for prequalification. If you're happy with your financial situation and credit score, choose a lender and apply for prequalification. Since this is just a rough estimate, you don't need to get prequalified with more than one lender. Most lenders let you apply online and get results within 24 hours.

Learn more: How to Shop for a Mortgage

Get Your Credit Ready for a Mortgage

Getting prequalified for a mortgage is a smart way to explore the possibilities for financing your home purchase. Armed with your prequalification amount, you can begin investigating options for homes in your price range. If your prequalification estimate is lower than you hoped, you can take actions such as improving your credit score, paying down debt or saving for a bigger down payment, which could help you qualify to borrow more.

Wherever you are in your homebuying journey, staying on top of your credit throughout the process is key. Experian's free credit monitoring service makes it easy to track your progress as you work on improving your credit. You'll also get alerts of important changes to your credit report so you can act quickly to tackle potential roadblocks to mortgage approval.