FHA Loan Calculator – Check Your FHA Eligibility
Discover your FHA buying power
FHA loans require just 3.5% down, and are ultra-lenient on credit scores and employment history compared to other loan types.
The first step to seeing if FHA can make you a homeowner is to run the numbers with this FHA mortgage calculator.
FHA mortgage eligibility
FHA loans are typically available to those who meet the following qualifications:
- A credit score of 580 or higher (lower scores eligible with
- A debt-to-income ratio of 43% or less
- 3.5% down payment
- 1-2 years of consistent employment history (most likely 2 years if self-employed)
- A property that meets FHA standards or is eligible for FHA 203k financing
These are general guidelines, however, and home shoppers should get a full qualification check and pre-approval letter from an FHA lender. Many buyers are eligible, but don’t know it yet.
FHA mortgage calculator definitions
FHA is the loan of choice for thousands of first-time and repeat buyers each month. In 2016 alone, nearly 900,000 buyers used an FHA loan to purchase a home.
The above FHA mortgage calculator details costs associated with FHA loans or with home buying in general. But many buyers don’t know what each cost is for. Below are definitions for these expenses.
Principal and interest. This is the amount that goes toward paying off the loan balance plus the interest due each month. This remains constant for the life of your fixed-rate loan.
FHA mortgage insurance. FHA requires a monthly fee that is a lot like private mortgage insurance. Called FHA Mortgage Insurance Premium (MIP), this fee is a type of insurance that protect lenders against loss in case the home buyer can’t make the payment. The FHA MIP rate is 0.85% of the loan amount per year, but can vary from 0.45% to 1.05% per year depending on your loan amount and down payment. Read more about FHA MIP here.
Property tax. The county or municipality in which the home is located charges a certain amount per year in taxes. This cost is split into 12 installments and collected each month with your mortgage payment. Your lender collects this fee because the county can seize a home if property taxes are not paid. The calculator estimates property taxes based on averages from tax-rates.org.
Homeowners insurance. Lenders require you to insure your home from fire and other damages. This fee is collected with your mortgage payment, and the lender sends the payment to your insurance company each year.
HOA/Other. If you are buying a condo or a home in a Planned Unit Development (PUD), you may need to pay homeowners association (HOA) dues. Lenders factor in this cost when determining your ratios. (See an explanation of debt-to-income ratios above). You may put in other home-related fees such as flood insurance in this field, but don’t include things like utility costs.
Down payment. This is the dollar amount you put toward your home cost. FHA requires 3.5%. This can come from a down payment gift or eligible down payment assistance program.
Interest rate. The mortgage rate your lender charges. Shop at least three lenders to find the best rate.
Upfront MIP. FHA requires an upfront fee which is wrapped into the loan amount (not paid in cash). Like monthly MIP, it insures lenders so they can approve loans at FHA’s lenient standards.
FHA loan limits
Make sure your loan is within FHA loan limits, which equal 115% of the county’s median home price.
More about FHA loans
Learning about FHA loans is easy. See our FHA loan guide for everything you need to know about the program. Additionally, see our other articles on this powerful loan program.
- Buying a fixer-upper with an FHA 203k loan
- FHA vs Conventional 97
- FHA minimum credit scores
- How to cancel FHA mortgage insurance
Apply now for an FHA loan
Many home buyers qualify for FHA — they just don’t know it yet. Check your eligibility and start the pre-approval process now.