Mortgage calculators help you estimate your monthly loan payment including principal and interest, property taxes, and insurance. Some calculators estimate how much monthly payment you can afford, others help determine how much of a house you can afford as a total number.

Most of these calculators will ask questions about your monthly income, expenses, and more. These quick calculators don’t use the same process as a mortgage lender or take into account other lending factors.

Why mortgage calculators don’t work for low-income families

Many first-time homebuyers turn to a mortgage calculator to see if they can afford to buy a home. One of the biggest questions is “how much house can I afford?”. For many low-income people using a traditional mortgage calculator immediately ends their dream of becoming a homeowner.

Houston Habitat for Humanity is committed to partnering with families to help them buy affordable homes and create safe places to live. We are not an online tool, but real people who are here to partner with those families that are most in need.

Here are some ways that Houston Habitat for Humanity can help you secure an affordable home:

Why do I need a mortgage? Aren’t Habitat for Humanity homes free?

Houston Habitat homes are not free houses. Part of partnering with Houston Habitat is ensuring our families secure their own mortgage because homeownership helps families accumulate wealth over time as they build equity.

How can Houston Habitat help me secure a mortgage?

Houston Habitat works with a variety of lenders to secure an affordable mortgage for every family who qualifies for our program. There are low income home loan options for different types of loans. Habitat is committed to ensuring mortgage payments consume no more than 30% of a homeowner’s income and meets this goal by offering financial packages composed of low- or zero-interest loans and forgivable loans.

Typically, our families will earn enough annually to pay back the mortgage for the home that they buy from Habitat, but not quite enough to qualify for a traditional home loan. Factors that contribute to securing a mortgage include annual income, down payment, credit score and debt to income ratio.

How important is my credit score?

Your credit score is important, but not the lone factor in securing an affordable mortgage. The better your credit score, the better interest rate you’ll qualify for and the more loan options that will be available. So the lower your credit score, the higher the interest rate.

Typically a score of 620 will ensure a good interest rate. If your score is lower than this, don’t lose hope! Building strong credit takes time, but the steps aren’t complicated and our educational team can provide resources to learn about improving your credit with financial counseling. While preparing to buy a home, practice following a budget, make sure you make all payments on time (missed payments can sink your score pretty quickly), reduce your balances (the more available credit, the better), and avoid opening too many new accounts.

What should my annual income be to qualify for a mortgage?

Before qualifying for a mortgage, you need to apply to be part of our homeownership program. Annual income requirements are based on the size of your family and your income. To partner with Houston Habitat, your annual income must be between 50-80% of the annual median income for Houston as established by HUD.

Want to see if you are eligible to be a Houston Habitat Homeowner?

Take our Eligibility Quiz