Question:

How to calculate loan amount when I know the monthly payment?

Answer:

Sometimes borrowers want to know how to calculate loan amount based on how much they would like to pay monthly. It will be enough to know how much your desired monthly payment is, at what rate you will borrow the mortgage loan, and the years of the loan.

Calculating the Loan Amount Knowing the Monthly Payment

For example, if you want your monthly principal and interest payment to be $1600, and you want a loan at 6.375% for 240 months (20 years) your eligible loan amount will be around $217,000 according to a web calculator.

Have in mind that you will be paying PMI, homeowners insurance, and taxes to properly estimate how much loan you can take.

Lenders are likely to calculate the loan amount you are eligible for when underwriting your application. They'll be using front-end and DTI ratio to make the assessment.

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Common misspellings: mortage and morgage