FHA Mortgage Calculator: Increasing the Benefits of your FHA Mortgage Loan! 

FHA Mortgage vs Conventional Loans
There are some major differences between an FHA loan and a conventional loan. These differences can cost you money in the end if you aren’t careful!

An FHA mortgage calculator can help you see the full picture!

"FHA loans where instituted in 1937 by Congress when the Federal Housing Administration was developed in order to provide a better and fair opportunity for an increased number of individuals to become home owners."

The Start of FHA Mortgages
As the country was still in the throes of the Great Depression, this had become an increasingly difficult task as most individuals could not afford to pay cash for a home or even make the standard down payment for a home purchase. As a result individuals were then able to make purchases of single family homes as well as 2, 3 and 4-unit properties in both urban and rural areas. Today, it’s just as easy to become approved for an FHA mortgage loan as it was then.

One of the things you need to understand is that this ease of approval is due to the fact that the risk of the lender is reduced because the loan is insured by FHA.
This means; however, that you will be charged for mortgage insurance with an FHA loan in order to cover the insurance FHA uses to back the loan.
Using an FHA mortgage calculator you can determine how much your mortgage insurance will cost you.

When using an FHA loan calculator the monthly PMI is .5% on all FHA loans! You must enter .5% when using your FHA calculator!

How Much Can I Afford?
There are specific requirements regarding how much house you can buy in relation to your earnings with all mortgages.

It can be helpful to use an FHA mortgage calculator before you start shopping for your home in order to understand how much you can actually afford.
This can help to prevent a situation in which you fall in love with a house only to have your dreams shot down when you discover that you can't afford that home because it doesn’t fall within the parameters of your affordability guidelines set by FHA.
Below are some tips on information that you will need in order to determine how much house you can afford using an FHA mortgage calculator:

• Purchase price of desired house
• Down payment
• Loan term
• Interest rate
• Points
• FHA Mortgage insurance is.5 on all loans; enter this on an FHA calculator
• Closing costs
• Annual property taxes and insurance

Using the data mentioned above, an FHA mortgage calculator will determine how much house you can afford based on a maximum ratio of monthly housing expense to income of 29% and a maximum ratio of total housing expense to income of 41%. 

The Big Question: How Much Down Payment?
After you find a home that you both like and can afford, an FHA mortgage calculator can also be beneficial in determining how much money you will need to put down on the home. While the down payment requirements for an FHA mortgage are significantly less than a conventional mortgage, you will be expected to make a down payment.
An FHA mortgage calculator can help you determine how much that amount might be based on the purchase price of the home.

Down the road you might also want to consider using an FHA mortgage calculator if you are interested in refinancing your home. This is a popular idea because FHA mortgages are not subject to prepayment penalties; however before you take such a big step you would need to determine whether it would be financially worth it or not to refinance.

So, in the end, there are numerous advantages to using a FHA mortgage calculator such as:

• Low down payment - as little as 3% down payment
• Down payment can be a gift from a family member
• Seller can pay up to 6% of sales price for closing costs
• No cash reserves are required
• FHA mortgages are assumable

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