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FHA Loan Calculator

When the FHA buys approved loans from commercial lenders, it then packages them for sale on the securities market as Mortgage Backed Securities (MBS).  The quasi-private organization that oversees the sale and maintenance of these securities is Ginnie Mae, the Government National Mortgage Association.  Their website has some calculators that can assist the potential home buyer considering an FHA loan.  All of them can be found at http://www.ginniemae.gov/ypth/index.asp?subTitle=YPTH

The first calculator that is supplied compares renting to home ownership.  Information that the calculator uses includes the size of the down payment, which in the case of an FHA loan is 3%.  Further questions include the amount of time you intend to be in the home, the purchase price of the home, your current rent, the interest rate on your mortgage and the yearly property taxes.

Ginnie Mae’s second mathematical exercise is the affordability calculator.  This one will come up with a figure that suggests how large a mortgage you can reasonably handle. 

The input for gross income is done  on a worksheet that is provided online.  It includes salary, tips, bonuses or commissions, income from investments, etc.  This calculator also calls for your monthly debt obligations such as car loans, minimum credit card payment, student loans, and any other monthly obligations such as utility bills.

The third and final calculator is a loan estimator.  This one will tell you how big an FHA loan you qualify for – or should seek while being responsible for other financial obligations.  Information required includes the home sale price and the location – both county and state.  The reason for this question is that the FHA has limits to the size of loan it will accept and those limits are based on median home prices in the area.

The second half of this calculator’s input includes the mortgage interest rate and mortgage term length.  Finally, you need to provide a figure for the cash that you have available for the down payment and closing costs.  Shortfall for closing costs can be included in the mortgage.

Ginnie Mae’s site also has some excellent tips for the home shopping, mortgage shopping and purchase process.  It’s worth a visit just to get comfortable with the procedures you will be facing.

Also see Calculators4Mortgages.com for additional mortgage calculators which can help you decide whether an FHA loan is right for you.