Mortgage Calculator FL (Florida)
Overview of Florida Housing Market 2023
As of 2023, the Florida housing market continues to exhibit a dynamic and diverse landscape. The state's real estate market is influenced by a variety of factors, including economic conditions, population growth, tourism, and natural disasters. The demand for housing in Florida is driven by both domestic and international buyers seeking primary residences, among others. However, challenges such as rising home prices, limited housing inventory in certain areas, and potential climate-related concerns can impact the market's overall health.
At Brighton Bank, our commitment goes beyond just providing financial services. We believe in empowering our customers with the tools and resources they need to make informed decisions about their financial future. That's why we've put together this dedicated mortgage calculator landing page – to offer you a seamless, transparent, and personalized way to explore your home financing options.
What's on this page?
-Property Tax in Florida
-Closing Costs in Florida
-Housing Market in Florida
Mortgage Calculator FL (Florida)
How to Calculate a Mortgage Payment
Calculating a mortgage payment involves a few key components: the loan amount, interest rate, loan term, and the type of mortgage. The most common type of mortgage is a fixed-rate mortgage, where the interest rate remains constant throughout the loan term. Here's how to calculate your monthly mortgage payment: The formula to calculate the monthly mortgage payment is:
M = P * [r(1+r)^n] / [(1+r)^n - 1]
The Variables are as follows:
M is the monthly mortgage payment.
P is the principal loan amount.
r is the monthly interest rate (annual rate divided by 12 and converted to a decimal).
n is the number of monthly payments (loan term in years multiplied by 12).
How a Mortgage Calculator can help you.
The Mortgage Calculator FL (Florida) is a powerful tool designed to assist individuals in making well-informed decisions about their home financing options. This calculator provides a range of benefits:
Payment Estimation: Predict your monthly mortgage payments based on loan details, aiding budget planning.
Scenario Comparison: Testing different loan amounts, interest rates, and terms to understand their effects on payments.
Loan term: Choose 30 years for lower monthly payments but higher interest or 15 years for less interest with higher monthly payments.
Avoiding strain: Brighton Bank's calculator factors taxes, insurance, and mortgage costs for a clear monthly commitment view.
Down payment: Lower 3% down payments feasible, calculator assists in optimal initial investment.
Affordability Assessment: Determining how much house you can comfortably afford within your budget.
Interest Analysis: This shows the total interest paid over the loan's life, guiding decisions on loan terms and types.
Key Determinants of Your Mortgage Payment
At Brighton Bank, we understand that your mortgage payment is influenced by a range of factors. Here are the essential elements that contribute to shaping your mortgage payment:
Loan Amount and Interest Rate: The total amount you borrow and the interest rate applied directly impact your monthly payment. A higher loan amount or interest rate typically results in higher monthly payments, while a lower loan amount or interest rate leads to more manageable payments.
Loan Term and Type: The length of your loan term and whether it's a fixed-rate or adjustable-rate mortgage matters. Shorter terms often have higher monthly payments but lower overall interest costs. In contrast, longer terms may offer lower monthly payments but potentially higher interest expenses over time.
Property-Related Costs: Property taxes based on your home's value and location, along with homeowners insurance to safeguard your investment, are included in your monthly payment. We can help you estimate these costs accurately.
Down Payment and PMI: A larger down payment reduces your loan amount, potentially lowering your monthly payment. If your down payment is less than 20 percent, Private Mortgage Insurance (PMI) might apply, adding a cost to your payment until you gain sufficient equity.
Our team at Brighton Bank is committed to guiding you through these intricacies, ensuring you make informed decisions tailored to your financial aspirations. With our expertise, you can navigate these elements and secure a mortgage payment that suits your unique needs.
What you can do to lower your monthly payment
A mortgage constitutes a long-term financial arrangement aimed at funding a home purchase, necessitating both repayment of the principal amount and the regular settlement of interest to the lender. The monthly cost of a mortgage can vary significantly based on factors like property price, location, and the type of loan selected.
To assist you in curbing your monthly mortgage expenses and achieving savings, Brighton Bank offers insightful strategies:
Opt for a more budget-friendly home: Selecting a less expensive property translates to a reduced loan amount and subsequently lowers your monthly mortgage obligation.
Make a larger down payment: If you make a down payment of 20% or more, you won't have to pay private mortgage insurance (PMI). PMI is an extra insurance that lenders require if your down payment is less than 20%. It can add hundreds of dollars to your monthly mortgage payment.
Secure a lower interest rate: Engage in thorough research across different lenders to identify the most favorable interest rate, contributing to a decreased overall mortgage expense.
Adjust your loan term: Opting for a longer loan term results in more manageable monthly payments, though it leads to a higher cumulative interest payment over time.
How lenders decide how much you can afford to borrow
When considering your borrowing capacity, Brighton Bank takes into account several key factors to ensure a responsible and suitable lending decision. Here's how Brighton Bank determines your borrowing capacity:
Income Evaluation: Brighton Bank assesses your income stability and sources to gauge your ability to comfortably make repayments.
Debt-to-Income Ratio (DTI): The bank analyzes your existing debts in relation to your income to determine a borrowing amount that maintains a manageable debt load.
Credit History Check: Your credit score and history are reviewed to judge your creditworthiness and ensure that the borrowing terms align with your financial track record.
Down Payment & Affordability: Brighton Bank considers your down payment amount, overall property expenses, and the chosen loan type to ensure that the borrowing amount remains within your financial means.
Determining Your Affordable Home Budget in FL (Florida)
Determining an affordable home budget in Florida involves a careful assessment of various financial factors to ensure a balanced and sustainable purchase. Firstly, evaluating your current financial situation is crucial. Consider your monthly income, including all sources, and deduct essential expenses such as utilities, groceries, transportation, and debt payments. This will give you a clearer picture of the funds available for housing costs.
For instance, if your monthly income is $5,000, your essential expenses amount to $2,000, and homeownership costs are estimated at $1,000, your affordable home budget would be around $2,000 ($5,000 - $2,000 - $1,000). This budget provides a realistic guideline for exploring housing options that align with your financial capacity, helping you make a responsible and sustainable home purchase in Florida.
Beyond the mortgage payment, there are property taxes, homeowner's insurance, potential homeowner association (HOA) fees, and maintenance costs to consider. It's recommended that these additional costs do not exceed 25-30% of your monthly income to maintain financial stability.
Keep in mind that while you might be approved for a certain mortgage amount, it's wise to stay within a budget that allows you to comfortably cover all monthly expenses without overstretching financially. By thoroughly evaluating your financial situation, you can confidently embark on your home search in Florida with a clear understanding of your affordable budget.
Next Steps: What to Do After You Have Estimated Your Mortgage Payments
Following your estimation of mortgage payments, the journey towards homeownership unfolds with essential next steps guided by Brighton Bank.
Whether you're embarking on this path for the first time, considering refinancing, or managing credit challenges, Brighton Bank is here to offer invaluable support at every phase.
Compare Our Rates: Before making a commitment, it's crucial to explore and assess offers from various mortgage providers. Brighton Bank encourages you to compare our rates with others, ensuring you make an informed decision. For more details, you can also access information about mortgage rates tailored to your location.
Undecided? Rent or Buy: If you're still weighing the options between renting and buying a home, Brighton Bank provides the guidance you need to evaluate which choice best suits your unique circumstances and financial goals.
Expand Your Knowledge: Brighton Bank provides a comprehensive resource to help you expand your understanding of diverse mortgage options. Whether you're interested in reverse mortgages, VA home loans, or FHA home loans, Brighton Bank equips you with insights to select the mortgage type that aligns with your preferences and requirements.
The Florida housing market is in a state of flux, influenced by an array of factors that collectively shape its dynamics. The rising home prices, while indicative of the market's resilience and desirability, could impact the ability of first-time buyers to enter the market. This raises important considerations about affordability and access to homeownership, especially in the context of wage growth and economic fluctuations. Navigating the Florida housing market requires a keen understanding of its intricacies. The decrease in the number of homes sold compared to the previous year, despite the price increase, hints at shifting consumer sentiments and a potential need for market adaptation.
This metric underscores the evolving balance between buyers and sellers and hints at potential shifts in negotiation power. The housing market's resilience and capacity to adapt are key as it navigates challenges such as rising prices and inventory constraints, which can impact the overall health of the market. Localized variations within different regions of Florida further contribute to the nuanced nature of the market, requiring potential buyers, sellers, and investors to remain attuned to the intricate details and trends to make informed decisions in this ever-evolving landscape.
In July 2023, the median home price in Florida saw a 1.5% increase compared to the previous year, reaching $404,100. The number of homes sold, however, experienced an 8.2% decrease year over year, with a total of 31,423 homes sold this July, down from 34,220 homes sold in the same month last year. The median time homes spent on the market was 40 days, reflecting a 15-day increase compared to the previous year.
What is the housing market like right now?
What does this mean?
The trajectory and speed of home price fluctuations serve as markers for the housing market's robustness and the shifting affordability of homes. Presently, the median home price in the United States stands at $404,100.
Average Closing Cost in FL (Florida) Counties
When buying a home in Florida, it's crucial to consider not only the purchase price but also the closing costs associated with the transaction. Closing costs encompass a variety of fees and expenses that are typically paid at the closing of the real estate deal. These costs can vary significantly depending on the county in which you're purchasing the property
Average closing costs are the fees and expenses that homebuyers and sellers typically incur during the process of closing a real estate transaction. These costs can vary widely depending on factors like location, property value, and the specific terms of the deal. On average, closing costs typically range from 2% to 5% of the home's purchase price. For a homebuyer, these costs can include expenses such as loan origination fees, appraisal fees, title insurance, property taxes, and attorney fees. Sellers, on the other hand, may be responsible for costs like real estate agent commissions, transfer taxes, and any outstanding liens or repairs required to close the sale.
The exact breakdown of closing costs can differ from one transaction to another, but certain fees are fairly standard across most real estate transactions. These can include lender fees, title insurance, and escrow fees. It's essential for both buyers and sellers to carefully review the estimated closing costs provided by their real estate professionals and lenders to have a clear understanding of the financial implications of the transaction. Homebuyers may also have the opportunity to negotiate some of these costs with the seller or lender, potentially reducing their financial burden during the closing process.
The average closing costs encompass a range of fees and expenses incurred when buying or selling a property, and they typically amount to a percentage of the home's purchase price. The specific costs can vary widely depending on various factors, and it's crucial for individuals involved in a real estate transaction to be aware of these costs and to review and negotiate them whenever possible. Understanding closing costs is a fundamental aspect of the homebuying or selling process and helps individuals budget effectively for the overall cost of their real estate transactions.
Average Property Tax in FL (Florida) Counties
Understanding average property taxes in different Florida counties is crucial for homeowners and investors. It helps assess affordability, make county comparisons, plan finances, and guide investment choices. This knowledge informs budgeting, decision-making, and potential returns on real estate investments.
The dataset provides a comprehensive view of property tax-related metrics across several Florida counties, offering valuable insights into the state's diverse property tax landscape. One notable aspect is the considerable variation in median home values. Counties like Broward and Collier exhibit substantially higher median home values of $282,400 and $366,600, respectively, which can be indicative of a more affluent housing market. Conversely, counties like Dixie have notably lower median home values, at $85,000, likely reflecting more affordable housing options.
This range in home values also corresponds to differences in property tax payments and tax rates. For instance, Broward County residents pay a median annual property tax of $3,375, with an average effective property tax rate of 1.20%. In contrast, Dixie County residents pay significantly less, with a median annual property tax of $543 and an average effective property tax rate of 0.64%.
These variations in property tax burdens highlight the impact of local property values and tax rates on homeowners' financial responsibilities. It's crucial for both current homeowners and potential buyers to consider these factors when making decisions about where to live or invest in property. Furthermore, this data underscores the need for a nuanced understanding of the property tax landscape to ensure informed financial planning and property investment in Florida's diverse counties.
What Property Tax Exemptions Are Available in Florida?
Let's delve into four common property tax exemptions applicable in Florida:
Homestead Exemption. Under the Florida exemption system, homeowners may exempt an unlimited amount of value in their home or other property covered by the homestead exemption. However, the property cannot be larger than half an acre in a municipality or 160 acres elsewhere.
Disabled Veterans Exemption. Resident Veterans in Florida with at least a 10% disability rating are entitled to a $5,000 deduction on the assessment of their home for tax purposes. Resident Veterans in Florida with a 100% disability rating may receive a full property tax exemption.
Senior Citizens Exemption. In Florida, an additional $50,000 Homestead Exemption for Persons 65 and older reduces the assessed value of your property and can result in significant tax savings.
Disabled Persons Exemption. A Florida resident who has been certified by two Florida licensed physicians, as being quadriplegic, paraplegic, hemiplegic, legally blind, or who uses a wheelchair for mobility can qualify for a $5,000 Disability Exemption on the assessed value of the property.
Property Tax Landscape in Florida and Beyond
The property tax landscape in Florida is characterized by a complex interplay of local regulations, economic factors, and homeowner considerations. In Florida, property taxes serve as a significant source of revenue for local governments and fund essential services such as education, infrastructure, and public safety. The state's unique lack of a state income tax places a particular emphasis on property taxes as a means of generating revenue.
Beyond Florida, property tax landscapes vary widely across different states and jurisdictions. States like Texas rely heavily on property taxes due to their lack of income taxes, while others with robust income tax systems may have lower property tax rates. Property tax rates are typically determined by local governments and can fluctuate based on the community's needs and economic conditions. Homeowners often face the challenge of balancing the benefits of homeownership with the financial responsibilities of property taxes. This intricate landscape underscores the importance of understanding local regulations, exemptions, and tax structures when making real estate decisions.
Factors influencing property taxes extend beyond state boundaries. Economic downturns can impact property values, leading to potential reductions in tax assessments and homeowners' financial situations and housing market fluctuations further contribute to the dynamic nature of property tax landscapes.
The amount of property tax you pay is based on the assessed value of your property. The assessed value is not necessarily the same as the market value of your property. The assessed value is set by the county assessor, and it is based on a number of factors, including the size and location of your property, the quality of construction, and the recent sales of comparable properties.
Home insurance, also known as homeowners insurance or property insurance, is a type of insurance policy that provides financial protection to homeowners against various risks and perils that could damage or destroy their property. This insurance coverage helps homeowners recover financially in case of unexpected events that result in damage to their homes, or belongings, or liability for injuries or damages to others that occur on their property.
Coverage Types and Options
When it comes to protecting your most valuable asset, understanding your options is essential. Home insurance offers various types of coverage to ensure you're safeguarded against unexpected events. Here are some key coverage types:
Dwelling Coverage: This protects the structure of your home itself, including its foundation, walls, roof, and more.
Personal Property Coverage: Covers your belongings, such as furniture, electronics, and clothing, in case of damage or theft.
Liability Coverage: Offers financial coverage in the event someone gets hurt on your premises and you are deemed liable.
Additional Living Expenses: Helps with temporary housing and living expenses if your home becomes uninhabitable due to covered events.
Factors That Determine Coverage Needs for FL (Florida)
When considering homeowners insurance in Florida, there are several factors that will determine the coverage you need. These factors can vary from person to person, but it's important to understand them in order to make an informed decision about your policy. Here are some key factors to consider:
Location - The location of your home plays a significant role in determining your coverage needs. Florida's diverse landscape presents varying risks, such as coastal vulnerabilities, flood-prone zones, and high-crime neighborhoods. Coastal cities like Miami and Key West face hurricane and flooding threats, while flood-prone areas like parts of Miami-Dade County require flood insurance considerations. High-crime neighborhoods can be found in cities like Miami and Jacksonville, necessitating careful research into local crime data and security measures. Before relocating, individuals should assess insurance needs, emergency preparedness plans, property values, local services, and consult with local experts to make informed decisions based on their risk tolerance and priorities.
Coastal Proximity - For homes located near the coast, there may be increased risks associated with hurricanes, storm surges, and coastal erosion. It's important to have coverage that protects your property from these potential threats.
Flood Zones - If your home is located within a flood zone, it's crucial to have flood insurance coverage, as standard homeowners insurance policies typically do not cover flood-related damages.
High-Crime Neighborhoods - Homes situated in areas with higher crime rates may require additional coverage for theft and vandalism. This can help protect your property and belongings in case of unfortunate events.
Dwelling Features - The characteristics of your home also influence your coverage needs. Factors such as the age, size, construction materials, roof type, and overall condition of your dwelling can impact the cost of insurance and the level of coverage required.
Property Value - The value of your home determines the amount of coverage you need to adequately protect your investment. It's essential to insure your home for its replacement cost, ensuring that you would receive enough compensation to rebuild or repair any damages.
Personal Belongings - The value of your personal belongings inside your home is another crucial aspect to consider. Expensive items such as jewelry, artwork, or electronics may require additional coverage through personal property endorsements or scheduled personal property policies.
Tips for Lowering Your Homeowners Insurance Premiums for FL (Florida)
Homeowners in Florida are often looking for ways to save on their insurance premiums. Here are some helpful tips to lower your homeowner's insurance costs:
Explore Options: Don't just accept the initial quote you get. Make an effort to obtain and compare estimates from several insurance providers.
Increase Deductibles: Think about increasing your deductible if you can afford a larger upfront cost during a claim.
Combine Coverage: A lot of insurance firms provide discounts when you merge various policies, like home and car insurance. Inquire about the potential savings when obtaining quotes.
Improve Home Security: Installing smoke detectors, burglar alarms, deadbolt locks, and other security measures can reduce the risk of damage or theft, leading to lower premiums. Be sure to inform your insurer once you have implemented these security features.
Maintain Good Credit: In many states, including Florida, insurance companies can use your credit score to determine your premiums. Keeping a strong credit rating can assist in reducing your insurance premiums.
Stay Claims-Free: Building a claims-free history can often lead to discounts on your premiums. Avoid making smaller claims and save your insurance for significant losses.
By implementing these tips, homeowners in Florida can potentially enjoy significant savings on their homeowner's insurance premiums while maintaining adequate coverage.
Trends in Homeowners Insurance Rates for FL (Florida)
Homeowners insurance rates can fluctuate over time due to various factors. Staying informed about the trends in homeowners insurance rates helps homeowners in Florida make educated decisions regarding their policies. Here are some recent trends worth considering:
Increasing Material and Labor Costs: The cost of building materials and labor can impact homeowners insurance rates. In recent years, the rising prices of construction materials and the demand for skilled labor have contributed to an increase in insurance premiums.
Climate Change Impact: Climate change can result in an increase in severe weather events, including hurricanes, storms, and floods. These events can cause significant property damage and result in insurance companies adjusting their rates accordingly.
Technological Advances: Advancements in technology have led to improved methods of assessing risks and deciding insurance premiums. Insurance companies are increasingly leveraging data and analytics to determine rates, resulting in more accurate pricing based on individual risk profiles.
Market Competition: The competitive landscape among insurance companies in Florida can influence rates. When multiple insurers compete for customers, it can lead to more competitive pricing and potential savings for homeowners.
Legislative Changes: Changes in local or state laws can also impact homeowners insurance rates. It's important to stay informed about any regulatory changes that may affect your premiums.
Keeping an eye on these trends helps homeowners in Florida understand the factors driving insurance rates and make informed decisions when purchasing or renewing their policies.
Average Homeowners Insurance Costs for FL (Florida)
Understanding the average homeowners insurance costs in Florida provides homeowners with a benchmark for comparison. While individual premiums can vary based on numerous factors, here is an overview of the average costs in the state:
In August 2023, the average yearly cost of homeowners insurance in Florida is $2,288, amounting to $191 per month. This cost is notably 30% less than the national average expenditure of $1,754 per year.
- This average cost, however, can vary depending on the factors discussed previously, such as location, dwelling features, property value, and personal belongings.
- Coastal properties or areas prone to flooding may experience higher premiums due to increased risks.
It's important to note that this average cost is for a standard homeowners insurance policy and does not include any additional coverages or endorsements.
Homeowners should request personalized quotes from insurance companies to obtain accurate estimates based on their specific circumstances.
By understanding the average homeowners insurance costs in Florida, homeowners can better budget for their insurance expenses and ensure they have appropriate coverage without overpaying.
Florida State Average Insurance Premiums by Dwelling Limit
The data presented provides valuable insights into the property tax landscape in the state of Florida, offering a clear picture of how property taxes are structured across different home values. Notably, the data reveals a consistent trend of rising property tax obligations as the assessed value of homes increases. For example, a property valued at $250,000 in Florida carries an estimated property tax of $1,967.82, while a more upscale $750,000 property commands a substantially higher property tax of $5,243.13. This pattern strongly indicates a progressive property tax system, where homeowners with higher-valued properties shoulder a proportionally larger share of their property's value in taxes.
Florida's progressive property tax system serves multiple purposes. Firstly, it helps fund essential public services, such as education, healthcare, and infrastructure development, ensuring that these services are adequately funded. Secondly, it aims to promote a fairer distribution of the tax burden, as those with more valuable properties contribute proportionally more to the state's revenue pool.
For individuals considering homeownership in Florida, this data serves as a valuable resource. It enables prospective homebuyers to estimate their potential property tax obligations based on the assessed value of the homes they are interested in, which is essential for accurate budgeting and financial planning. Additionally, this data emphasizes the need for all homeowners, whether prospective or current, to consider property taxes as a significant ongoing expense associated with property ownership. As property values can appreciate over time, homeowners should also be prepared for potential increases in their property tax bills.
Mortgage Resources in FL (Florida)
Mortgage resources refer to various tools, information, and support available to individuals seeking to obtain or manage a mortgage loan. Mortgage resources are valuable for both first-time homebuyers and existing homeowners looking to refinance or better understand their mortgage options.
Brighton Bank Mortgage Services
Are you looking for reliable mortgage services in Florida? Look no further than Brighton Bank! We are dedicated to helping you achieve your homeownership dreams with our range of mortgage solutions tailored to meet your unique needs. Whether you're a first-time homebuyer or a seasoned real estate investor, Brighton Bank is here to assist you every step of the way.
Why Choose Brighton Bank for Your Mortgage Needs?
1. Personalized Service: Our team of experienced mortgage experts will work closely with you to understand your financial goals and find the right mortgage product that fits your budget and lifestyle.
2. Competitive Rates: We offer competitive interest rates and loan terms to help you save money over the life of your loan. Our goal is to make homeownership affordable for you.
3. Simple Pre-Approval Process: Getting started on your homeownership journey is easy with Brighton Bank. You can kickstart the pre-approval process today with just a few simple steps.
Start Your Homebuying Journey with Brighton Bank
Ready to take the first step towards homeownership in Florida? Click the button below to begin the pre-approval process with Brighton Bank. Our team is excited to work with you and help you achieve your homeownership dreams!
Local Economic Factors in FL (Florida)
Beyond your mortgage payment, it's essential to consider the local economic factors that can impact your financial stability and property value in Florida:
Employment Opportunities: The availability of jobs and the health of local industries play a role in your financial security and ability to meet mortgage payments.
Market Trends: Real estate markets can experience fluctuations in prices. Our team can provide you with insights into current market trends to assist in your decision-making.
Infrastructure and Development: Development projects, transportation networks, and infrastructure improvements can affect the desirability and value of properties in certain areas.
Property Value Trends: Understanding how property values have changed over time can give you a sense of the potential appreciation of your investment.
Using a mortgage calculator is a simple and efficient way to estimate your monthly mortgage payment. By entering essential details like the loan amount, interest rate, and duration of the loan, you can swiftly determine your monthly payments. It's crucial to note:
Loan Amount (Principal): This is the total amount of money you're borrowing to purchase the property.
Interest Rate: This is the annual interest rate on the loan. Make sure to convert this to a decimal by dividing it by 100.
Loan Term: The loan term is the number of years you have to repay the loan. It's usually expressed in years. Typical loan terms are 15, 20, or 30 years. A longer-term typically results in lower monthly payments but more interest paid over time.
Down Payment: The down payment is the initial amount of money you contribute toward the purchase price of the home. It's usually a percentage of the home's price, and a larger down payment can result in lower monthly payments.
Amortization: Amortization is the process of gradually paying off your mortgage over time through regular monthly payments. Early on, a larger portion of your payment goes toward interest, while later in the loan term, a larger portion goes toward paying down the principal.
Closing Costs: These are the fees associated with finalizing the mortgage and completing the home purchase. They can include things like appraisal fees, attorney fees, title insurance, and more.
Housing Market: The housing market refers to the buying and selling of residential properties. It includes all the activities and transactions related to homes, apartments, and other types of housing.
Mortgage: A mortgage refers to a loan acquired to buy a home, where the property acts as security for the borrowed amount.
Private Mortgage Insurance (PMI): A type of insurance that is often required by lenders when a borrower puts down less than 20% of the home's purchase price as a down payment. It's commonly used to mitigate the increased risk associated with lower down payments.
Debt-to-Income Ratio: A financial metric used by lenders to assess a borrower's ability to manage their debt payments in relation to their income. The DTI ratio helps lenders evaluate the borrower's financial stability and the likelihood of repaying the loan.