Before you tour a single home, it helps to know roughly what a lender will approve. This estimator puts together the four things underwriters actually look at: income, debts, credit range, and down payment. It takes about a minute and doesn't touch your credit. When you want the real number, a Yellow approval takes 15 minutes and doesn't affect your rate either.
The estimate shows the loan amount and home price you could likely qualify for, plus an estimated monthly payment based on your credit range.
Income sets the maximum monthly payment a lender will allow. More documented income means a bigger approval.
Monthly debts reduce that maximum dollar for dollar. Clearing a $400 car payment can raise your approval by tens of thousands.
Credit range affects the interest rate the estimator assumes. A higher range means a lower rate, which means the same monthly payment covers a larger loan.
Down payment adds directly to your purchase price on top of the loan amount, and can lower your rate and remove mortgage insurance at 20%.
These three get mixed up constantly, and the difference matters when you make an offer.
An estimate (this tool) uses numbers you enter. It's a planning number. No verification.
Pre-qualification is a lender's informal read based on what you tell them. Usually no credit pull, no documents. Sellers give it little weight.
Pre-approval means a lender has verified your income, assets, and credit and is prepared to lend up to a specific amount. This is what makes an offer credible. It's the one you want in hand before you fall in love with a house.
Yellow's approval is the third kind, delivered in about 15 minutes.
Gross income: $95,000 per year. Monthly debts: $500. Credit range: 720 to 759. Down payment: $30,000.
At a 43% back-end limit, the maximum total monthly debt is about $3,400, leaving roughly $2,900 for housing. At the rate typical for that credit range, and after taxes and insurance, that supports a loan around $370,000. Add the $30,000 down payment and the estimated purchase price is around $400,000.
Move the credit range to 640 to 679 and the higher assumed rate drops the loan amount by $25,000 to $35,000, even though nothing else changed. That's how much credit matters.
Use your estimated price in the Mortgage Payment Calculator to see the full monthly breakdown.
If your debts are dragging the number down, the Debt-to-Income Calculator shows which ones to tackle first.
Want to compare the lender's number to what you'd actually be comfortable paying? The Home Affordability Calculator shows both.
.svg)
We turn the chaos of buying a home into a calm, guided journey. Mortgage, insurance, and move-in details handled seamlessly in one place.
.svg)
.svg){kind=small}
.svg){kind=small}
.svg){kind=small}
.svg){kind=small}
