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Methodology
How to read First Home Bay Area's calculator numbers, city data, assistance-program information, and educational guidance.
This site is for education and research only. It is not a substitute for a licensed lender, financial advisor, real-estate professional, attorney, tax professional, inspector, or insurance provider.
Labels
Verified fact, estimate, assumption, or guidance?
The most important rule is knowing what kind of number or statement you are looking at.
Verified fact
A value checked against the site data source or an official source and shown with source or last-verified context when available.
Estimate
A calculation result based on user inputs and transparent assumptions. Calculator outputs are estimates, not quotes or approvals.
Assumption
A default used when a buyer has not entered a personal value, such as the default property-tax, insurance, or PMI setting.
Educational guidance
Plain-English context to help a buyer ask better questions. It is not legal, tax, lending, financial, inspection, or real-estate advice.
Affordability
How the buying-power calculator works
The affordability calculator solves from income, debt, cash, and loan assumptions to an estimated purchase-price range.
The calculator first estimates a monthly housing budget using gross monthly income, existing monthly debt, and a 40% maximum back-end debt-to-income ceiling. It then solves for the loan amount and purchase price that fit that monthly budget after principal and interest, property tax, homeowners insurance, HOA dues, and PMI when applicable.
Cash needed is estimated as down payment plus 2.5% closing costs plus a 2-month reserve based on the total monthly payment. The displayed price range uses the solved maximum price as the high end and 85% of that value as a more comfortable reference point.
- Maximum back-end debt-to-income ratio: 40% of gross monthly income.
- Estimated closing costs: 2.5% of purchase price.
- Cash reserve: 2 months of the total monthly housing payment.
- Default property tax rate: 1.25% per year of purchase price, editable by the user.
- Default homeowners insurance: $2,400 per year, editable by the user.
- Default PMI rate: 0.5% per year of the loan amount, editable by the user.
- PMI applies only when the down payment is under 20%.
Payment calculator
How the home-price-to-payment calculator differs
The payment calculator answers a different buyer question: what would this specific home cost each month?
The payment calculator does not solve for a maximum price. The buyer enters the home price, down payment, interest rate, term, property tax, homeowners insurance, HOA dues, and PMI rate. The calculator then runs a direct forward calculation.
It uses the same shared mortgage math as the affordability calculator for principal and interest, property tax, insurance, PMI, and amortization schedules. PMI uses the same strict under-20%-down rule and is zero at 20% down or higher.
The payment calculator also estimates cash needed at closing — down payment plus the same ~2.5% closing-cost assumption and 2-month reserve used by the affordability calculator. It additionally supports two optional builder-incentive inputs: a permanent rate buydown (subtracted directly from the entered rate before computing principal and interest) and a builder or seller credit (subtracted from cash needed, but never reducing it below the down payment itself, since most loan programs don't allow a seller credit to cover the down payment). Saved scenarios can be compared side by side, the same way the affordability calculator's saved scenarios work.
Verification
How the calculator math was checked
The calculator formulas are not trusted just because they look right in code.
Real lender table check
The fixed-rate amortization factor was cross-checked against a real lender-style amortization table at spot-checked rates and terms.
Independent Python re-implementation
The affordability pipeline and payment-calculator examples were independently re-derived in Python and matched to the dollar in golden-value tests.
Month-by-month amortization simulation
The shared amortization math was checked against a full payment-by-payment simulation that confirms the loan balance reaches zero within rounding tolerance.
City data
Where city price data comes from
City pages read housing metrics from the site's Supabase data layer instead of hardcoded page text.
City pages can display median price, starter-home price, condo price, townhome price, typical HOA, estimated property-tax rate, inventory, days on market, source URL, and a last-verified date when those fields exist in the database.
If a city metric has not been verified yet, the UI shows "Data coming soon" or an equivalent unverified message. A last-verified date means that value was checked as of that date; it does not guarantee the market has not changed afterward.
Assistance and opportunity data
How program information is handled
Government and assistance-program information is useful only when buyers know what has been checked.
The Phase 2 data model separates public program and opportunity information from an internal monitored-source and detected-change workflow. Future monitoring jobs can propose changes, but those changes must be reviewed before they become public data.
Program eligibility, funding status, application windows, income limits, and award amounts can change. Buyers should use First Home Bay Area as a starting point and verify details directly with the official program source before relying on them.
True cost and cash to close
How related cost tools should be read
Both calculators now estimate cash needed, using the same formula and assumptions.
Both the affordability calculator and the payment calculator estimate cash needed using down payment, a 2.5% closing-cost assumption, and a 2-month payment reserve — the affordability calculator applies this to its solved maximum price, and the payment calculator applies it to whatever specific home price the buyer enters. The payment calculator additionally supports an optional builder/seller credit, which reduces cash needed but never below the down payment amount.
The city comparison tool lets a buyer put up to 4 cities side by side, including an estimated monthly payment at each city's median price using the same payment-calculator math and default assumptions. A fuller "Where Should I Buy?" tool — factoring in commute and life-anchor locations, not just budget — remains future Phase 3 scope. When built, it should follow the same rule as everything else here: expose the formula, label defaults as assumptions, and avoid presenting an estimate as a lender quote or professional recommendation.
No calculator on this site predicts loan approval, guaranteed eligibility, guaranteed affordability, tax treatment, insurance availability, or property appreciation.