Mortgage Number was launched to provide potential homebuyers with a tool to understand their financial strengths and weaknesses. It is vitally important for a consumer to determine exactly how much money they can qualify for when purchasing a home and what steps they can take to improve their financial profile before they become homeowners.
At the Mortgage Number website, a consumer can enter financial information about their current situation and the tool will calculate their potential buying power. When determining “Affordability” on the Home Page, Mortgage Number considers three attributes:
- Income to Qualify
- Borrowing Power
- Rent Money
To determine necessary Income to Qualify
the consumer must enter the estimated purchase price in one field, the estimated down payment they expect to contribute (such as, 3%, 5%, 10%, 20% or another amount) and their desired loan amount. Other monthly obligations are entered in the monthly debt
field. This figure is the sum of all monthly expenses such as minimum monthly credit card payments, student loan payments, car payments.
There is also a place to select the desired loan term, 30 year or 15 year.
Once all of the fields are populated, Mortgage Number calculates the monthly income necessary to qualify for that loan amount plus the debt. Additionally, it reveals what the annual income should be to qualify for a home loan using that scenario.
Now, by changing the financial attributes (by increasing or lowering monthly debts or the purchase price), with each click the monthly income needed either rises or falls as well as the necessary annual income; It’s dynamic! Entering the interest rate will have the same affect, the necessary income rises and falls with each change in interest rate—up or down.
Another valuable feature of Mortgage Number is the Borrowing Power.
By including an annual salary and minimum monthly debt, the tool estimates the consumer’s potential borrowing power.
Once again, if a lower monthly debt is disclosed, the consumer can qualify for a larger loan amount. Potential homebuyers need to understand how important daily spending is to their ability to obtain a loan. By reducing debt (particularly significant debt such as a car payment or something as seemingly insignificant as daily coffee habit) by $500 or more each month will greatly increase borrowing power.
The third attribute when considering affordability, is Rent Money
. Mortgage Number allows consumers who are renting right now to see the size of a mortgage they could afford based on what they’re currently paying for their monthly rent.
Learn more about Mortgage Number here.