ortage & Buy /Do-Not-Buy Calcutation Summary: 

"Our Math is Honest and based on Department of Air Force Instructions"

‍

PCSUnited and OrozcoRealty estimate home-buying readiness by calculating the user’s true all-in monthly housing cost and comparing it against income, existing expenses, debt, savings, and credit strength. The system does not rely only on whether a user may qualify for a mortgage. Instead, it evaluates whether the home appears financially sustainable after the full monthly load is considered.

The mortgage calculation starts with the projected home price and down payment. The basic formula is:

Down Payment Amount = Home Price × Down Payment Percentage

Loan Amount = Home Price − Down Payment Amount

The system then estimates the annual percentage rate, or APR, from the user’s credit score. For example, a score of 780 or higher uses an estimated APR of 6.10%, 740–759 uses 6.45%, 700–719 uses 6.95%, 660–679 uses 7.55%, and scores below 640 use 8.25%. These APR bands are planning assumptions, not lender quotes.

The monthly principal and interest payment is calculated using the standard amortized mortgage formula:

Monthly Interest Rate = APR ÷ 12

Number of Payments = Loan Term Years × 12

Principal & Interest = Loan Amount × [r × (1 + r)^n] ÷ [(1 + r)^n − 1]

Where r is the monthly interest rate and n is the number of monthly payments. If the interest rate is 0%, the system simply divides the loan amount by the number of payments.

PCSUnited then adds ownership costs that many buyers overlook. Property taxes default to about 1.2% of the home price per year unless a more specific value is available. Homeowners insurance defaults to about 0.35% of the home price per year unless a better local estimate exists. HOA and PMI are added when available. The all-in mortgage estimate is:

Monthly Property Tax = Home Price × Tax Rate ÷ 12

Monthly Insurance = Home Price × Insurance Rate ÷ 12

All-In Monthly Mortgage = Principal & Interest + Monthly Property Tax + Monthly Insurance + HOA + PMI

The buy-or-do-not-buy decision comes from comparing this all-in mortgage against the user’s income and total monthly obligations. The system calculates:

Non-Housing Load = Monthly Expenses + Monthly Debt

Total Monthly Load = All-In Mortgage + Monthly Expenses + Monthly Debt

Residual Income = Monthly Income − Total Monthly Load

Housing Ratio = All-In Mortgage ÷ Monthly Income × 100

Debt-Only Ratio = Monthly Debt ÷ Monthly Income × 100

Total Load Ratio / DTI = Total Monthly Load ÷ Monthly Income × 100

The readiness model then scores five areas: housing ratio, total load ratio, residual income, savings/down payment strength, and credit score. Housing ratio receives 26% of the score, total load ratio receives 28%, residual income receives 22%, savings receives 12%, and credit score receives 12%.

A housing ratio at or below 25% scores strongest. Around 30% is still healthy. Above 35% starts becoming risky, and above 40% is heavily penalized. For total monthly load, 28% or below is strongest, 36% or below is generally safe, 43% or below is workable but tighter, and anything above 50% is considered financially pressured. Residual income is also critical: $2,500 or more remaining monthly scores strongest, while low or negative residual income signals financial stress.

The final score becomes a financial grade. Higher scores produce Safe or Stable recommendations. Lower scores produce Caution or Stressed recommendations. In plain terms, PCSUnited may support buying when the user’s all-in mortgage is near or below 30% of income, total monthly load remains manageable, residual income stays positive, savings are adequate, and credit strength supports a reasonable rate. The system may recommend waiting or not buying yet when the mortgage creates a high housing ratio, total obligations consume too much income, residual income is weak or negative, or debt and expenses leave the user financially fragile.

‍