1. What Is the House Offer Calculator?

This calculator helps you determine the maximum price you can offer on a house based on what you can afford to pay monthly, considering the loan term and current interest rates.

2. How Does the Calculator Work?

The calculator uses the present value formula for an ordinary annuity:

Where:

• \( PV \) — Present value (maximum offer price)
• \( PMT \) — Affordable monthly payment
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Total number of payments (term in years × 12)

Explanation: The formula calculates the lump sum amount (house price) that would generate your desired monthly payment given current interest rates and loan term.

3. Importance of Calculating Your Offer

Details: Knowing your maximum offer price helps you stay within budget, negotiate effectively, and avoid financial strain from mortgage payments.

4. Using the Calculator

Tips: Enter your comfortable monthly payment, current mortgage rates, and desired loan term. The calculator will show the maximum house price you can offer while staying within your budget.

5. Frequently Asked Questions (FAQ)

Q1: Should I include taxes and insurance in my monthly payment?
A: Yes, for accuracy. Your total monthly payment (PITI) includes principal, interest, taxes, and insurance.

Q2: How does down payment affect this calculation?
A: This calculates the total loan amount. Your actual offer would be loan amount plus your down payment.

Q3: What if I want a 15-year mortgage instead of 30?
A: Shorter terms typically have lower rates but higher monthly payments for the same loan amount.

Q4: How accurate is this calculator?
A: It provides a good estimate but doesn't account for all fees. Consult a mortgage professional for precise figures.

Q5: Should I offer the maximum calculated price?
A: Not necessarily. This shows your upper limit. Consider offering less to leave room for negotiations and unexpected costs.