Mortgage Qualification - Debt Equity Calculator

Mortgage Qualification
Debt Equity Calculator
  Enter data below
Number of Payments (in months)
Interest Rate (percentage or decimal)
Purchase Price
Amount of Mortgage
GROSS Monthly Income
Real Estate Taxes (1 month)
Homeowner's Insurance (1 month)
Mortgage Insurance (P.M.I. 1 month)
Association Dues
Car Payments
Alimony/Child Support
Credit Card Payments
Other Loan Payments


Monthly Payment Monthly Housing Expense Monthly Bills LTV-Ratio Housing Ratio Debt Ratio
$ $ $ % % %


There are three ratios that banks and mortgage companies use to qualify a mortgage are the Housing Ratio (also known as the Income Ratio), the Loan-to-Value (LTV) Ratio, and the Debt Ratio.

The Housing Ratio is your total monthly payment including taxes and insurance divided by your total monthly income. Acceptable housing ratios for Conventional Loans are 28-33% and FHA Loans are 29-31%.

The Loan to Value (LTV) Ratio is the amount of the mortgage divided by the purchase price of the property or the property's appraised value. Higher LTV ratios may require mortgage insurance (PMI). Ratios above about 80% usually require mortgage insurance.

The Debt Ratio is the total of all monthly debt payments including monthly the mortgage payment divided by the total monthly income. Qualifying debt ratios for Conventional Loans are usually between 36-38%, FHA Loans are 41-43%, and VA Loans are 41%.

The calculator above is for reference and does not guarantee qualification for a mortgage from any institution.


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