MORTGAGE CALCULATOR AND IMPORTANT INFORMATION FOR BUYERS

You can use this handy Mortgage Calculator to assist you with calculating your approximate mortgage payment. This tool is only an estimate.  Please consult with a mortgage lender/broker to get an official estimate of a potential mortgage payment.

The Details

Home price - Enter your purchase price (without a comma)

Down Payment - The majority of loan require a minimum of 3% down.       However, there are many different programs that can assist buyers with funds to reduce the amount of cash down payment.  The best case scenario to try to put down 20% or more to avoid PMI (Private Mortgage Insurance, see below) Enter the down payment in dollars without a comma.

Interest Rate - The amount of interest on your home purchase varies widely based on the type of loan financing you secure.  There are adjustable rate mortgages (ARM), Fixed rate, Conventional, Government Insured (FHA, VA and USDA), and Jumbo.  Enter the rate in this format 3.5

Mortgage Term - This value is the number of years in the loan.

PMI - Private Mortgage Insurance (click here)

Taxes - This is an annual dollar amount based on the assessed value of your purchase. Note: The assessed value may be above or below your purchase price.  It is best to check with the local jurisdiction to see what the actual assessed value is.

Insurance - Also know as hazard insurance.  The policy is required when there is a mortgage on the property.  Depending on the severity of the potential for natural disasters and other risks your specific location will determine the cost for this annual policy.  Typically the policy amount is calculated as an annual amount and is collected each month by your lender with each mortgage payment you make.

HOA - Also known as Home Owners Association.  These fees are often assessed to each property so that the association can maintain the amenities of the neighborhood.  It is best to check with your Realtor to see if an HOA is still established in the area you wish to purchase as home.

This calculator is only provided to assist

you with an approximate mortgage payment.  You should consult with a

mortgage company or bank for a

payment which will be specific to your

exact financial situation.

PMI - Private Mortgage Insurance

Whether it's called “private mortgage insurance” (PMI) or just plain “mortgage insurance” (MI), mortgage insurance is an insurance policy which protects the lender in the event that you, the borrower, fail to make your mortgage payments. You pay for a policy as an inducement for the lender to offer you financing.

In general, if you can't (or don't want to) come up with a 20 percent down payment to buy your home, or don’t have a 20 percent equity stake when you refinance, you'll be required to purchase a private mortgage insurance policy as part of the mortgage process.  It's a tenet of mortgage lending that borrowers who don't have fairly substantial equity in their home are more likely to default. That's primarily why lenders insist that buyers borrow no more than 80 percent of the home price. Of course, having to come up with the other 20 percent -- in cash -- discourages many potential buyers who don't have such a large sum of money on hand.

The average cost of private mortgage insurance, or PMI, for a conventional home loan ranges from 0.55% to 2.25% of the original loan amount per year, according to Genworth Mortgage Insurance, Ginnie Mae and the Urban Institute.  The average rate is 1.4%.  As an example; $400,000 loan balance x .014 = $5,600 per year/12 months = $466.67 per month.  

 

Property Taxes

Unlike a mortgage (which can be paid off), property taxes are continuous with ownership and never end. : - )   The property taxes for every home will vary based on the assessed value of your home and the rate which the county/city will charge against the property.  This value is an annual dollar amount will fluctuate each year.  The average in America is 1.03%.  You can visit this link to find out an approximate value and enter into our calculator!

https://smartasset.com/taxes/property-taxes