FHA Mortgage Loan Calculator

To use the FHA mortgage calculator, all you need to do is provide us with a few basic pieces of information about the property, loan, taxes and insurance. We understand you might not know the exact numbers, especially if you’re still considering all your options. However, the calculator can provide you with an estimate to help you determine if an FHA loan is right for you.

Basic: Basic information about your loan can help us determine how much you’ll owe on a monthly basis as mortgage repayment.

• Purchase price: The purchase price is the amount you pay for the property. If you’re in the initial stages of house hunting, you can put an estimate here to help you determine whether a particular purchase price is affordable for you.
• Down payment: The FHA loan down payment is the out-of-pocket cost you make. The higher your down payment, the lower your loan amount and the more you can save over the life of your loan.
• Term (years): The loan term is the number of years you have to repay the loan. The most common options are 15 and 30 years.
• Interest rate: The interest rate is the cost of borrowing and is determined by personal financial factors like credit score and market conditions. The higher your credit score, the better your interest rate, so it’s worth increasing your score as much as possible before applying for a home loan.

Advanced: The advanced information can help us determine how much your monthly mortgage payment is based on additional factors like property tax and homeowners insurance, which your lender may pay on your behalf.

• Property tax (yearly): Property taxes are paid on real estate to fund local government projects and initiatives like schools, police and fire departments.
• Homeowners insurance (yearly): Homeowners insurance is an insurance policy that offers protection for your home and personal belongings in case of damage or theft.

An FHA loan is a mortgage type guaranteed by the Federal Housing Administration (FHA). It offers more flexible lending criteria, including lower down payments and more lenient credit qualifications. It’s a common myth that FHA loans are only for first-time buyers. However, anyone can qualify for them, although not everyone will.

Because an FHA loan is backed by the FHA, there are additional requirements besides your lenders. The FHA requires an appraisal and home inspection to ensure it meets their property requirements, and the loan is funded based on what the house is worth, not just the asking price.

While conventional loans also offer the option for low down payments, FHA loans are insured by the FHA, protecting lenders in case of default and allowing for more flexible lending criteria. FHA loans are more lenient in terms of credit requirements. In fact, borrowers with a lower credit score (580 or higher) may still qualify for these loans, while most conventional loans require a credit score of at least 620.

In addition, FHA loans may only be used for primary residences, while conventional loans can be used for primary residences, vacation homes and investment properties.

FHA loans come with numerous benefits for all types of borrowers because they have more flexible lending requirements. A few of the most significant benefits of FHA loans for borrowers include the following:

• Lower down payment: FHA loans allow for down payments as low as 3.5%. However, keep in mind that the lower your down payment, the more you’ll need to borrow.
• Flexible credit requirements: FHA loans allow for lower down payments than conventional loans.
• Competitive interest rates: Because FHA loans are guaranteed by the FHA, they’re less risky to lenders, allowing them to offer extremely competitive interest rates, reducing how much you’ll pay over the life of the loan.
• Lenient debt-to-income ratio: FHA loans allow for higher debt-to-income (DTI) ratios, allowing borrowers to have more debt and still qualify.
• Financial hardship assistance: The FHA offers financial hardship assistance to reduce the chances of borrowers defaulting on their loans and avoid foreclosures.

When applying for an FHA loan amount, your total loan amount and monthly mortgage payment will depend on several factors, including the following:

• Mortgage insurance premiums: Mortgage insurance premiums (MIPs) are required for all FHA loans for the life of the loan and include an upfront premium paid at closing and an annual premium paid as part of your monthly mortgage payment.
• Down payment: The larger your down payment, the less you’ll need to borrow. In addition, larger down payments can help you qualify for a larger loan amount.
• Property eligibility: Not all properties are eligible for the FHA loan. FHA loans can only be used for primary residences.
• Loan limits: FHA loan limits are the maximum amount allowed through the FHA loan program, and they vary by county based on housing market conditions. These limits change annually.
• Closing costs: All home loans require you to pay closing costs, but closing costs for FHA loans may be higher because you must pay an upfront MIP. To learn more about how much your closing costs will be, try our Closing Costs Calculator.
• Debt-to-income ratio: Having a lower DTI can help you qualify for a loan and reduce your interest rate, making your loan more affordable in the long term.

As mentioned, not all properties qualify for FHA loans since these loans can only be used for primary residences. The different types of properties that qualify for an FHA loan include the following:

• Single-family homes: The FHA loan allows you to purchase fixer-upper homes and build your own home. Single-family homes you can purchase with an FHA loan include detached homes, townhouses and some manufactured homes.
• Condos: FHA-approved condos are eligible for the loan. However, not all condo developments have FHA approval, so you should either contact someone at the FHA or work with an FHA-approved lender to determine if a certain condo qualifies for the loan.
• Multi-unit properties: FHA loans can be used to purchase multi-unit properties, but the borrower must live in one of those units, making the property their primary residence. The FHA loan will not finance investment or vacation properties.
• Mixed-use: FHA loans can also be used for mixed-use properties with residential and commercial components. However, there are restrictions, so it’s crucial to determine the property’s eligibility for the loan before making an offer.

Any property you intend to purchase with an FHA loan must meet the FHA’s minimum property standards for safety, soundness and habitability. All FHA-backed loans require appraisals and inspections. In addition, your lender may have specific eligibility requirements.