Mortgage Calculator Help

We’re here to help! Please use this mortgage calculator to determine what it will cost you to own a home. The calculator takes into account the purchase price of the home, down payment, estimated mortgage insurance, term of the home loan, interest rate, property taxes, home owners insurance, and home owners association dues or maintenance. If you have any question please give us a call.

Purchase price

The purchase price is the amount that the home will be purchased for. This is usually different than the listing price as offers made on a home can be lower than the listing price as well as  exceed the listing price of the home. After an offer is accepted by the home seller the price of the home on the contract will be the purchase price.

Down payment

The down payment is the amount of money that you put toward the equity on the purchase of the home. This is then calculated as the Loan to Value Ratio. If you were to make a 10% down payment on a home with a purchase price of $400,000 you would make a down payment of $40,000 and your remaining balance to be financed would be $360,000. The Loan to Value Ratio would then be 90% because 90% of the homes value is being financed.  The Down payment does not include other costs at closing such as attorney fees, establishing your escrow account and more.

Term

The loan term is the length of time until the mortgage is paid off. The majority of home loans are for 30 years but there are other options. Mortgages can be in loan terms of 10 years, 15 years, 20 years 30 years and more. The term of the loan will also effect the monthly payment as a shorter period of time may lower the amount of interest you pay but will increase the monthly payment. Another possibility is to obtain a longer term mortgage and make an additional monthly payment toward principal shortening the term of the loan and the amount of interest paid. 

Interest Rate

The interest rate is the rate at which you will pay the bank for lending the money to buy your home. Home Loan Programs can offer different interest rates as well as terms for interest rates. On a 30 year fixed mortgage the interest rate will remain the same for the loan term. With an adjustable rate mortgage the interest rate is often locked in for a pre determined length of time and at the end of the time period it can adjust, changing the monthly payment.

Property Taxes

Property taxes are the amount of yearly taxes due on your property. Property taxes are determined by the tax assessor and paid to the town, city, state and/or local government. Most mortgages Escrow taxes and insurance. This way there is one monthly payment for the mortgage, taxes, and insurances also called a PITI payment (Principal Interest Taxes and Insurance Payment)

Home Insurance

Home owners insurance also referred to as HOI or hazard insurance is determined by the insurance company. When buying a home you can search for a home owners insurance policy that your are comfortable with and meets all the mortgage requirements and state/federal laws. All homeowners are required to have home owners insurance. Check the laws in your state but for the most part the homeowners insurance policy is required to cover the cost to rebuild the home. Most mortgages Escrow taxes and insurance. This way there is one monthly payment for the mortgage, taxes, and insurances also called a PITI payment (Principal Interest Taxes and Insurances Payment)

Home Owners Association Dues (HOA Dues)

If you’re buying a condo, co-op, or a home within a home owners association you will have Home Owners Association Dues. These Dues are put into effect by the home owners association and often times go toward maintaining common elements, maintenance of the property, and services provided.

Mortgage Insurance

If you’re making a down payment of less than 20% you will most likely have mortgage insurance. On conventional loans a private mortgage insurance company will insure your home loan and will have a cost determined by various factors of your loan. Private mortgage insurance rates typically vary from 0.17% to 1.25%. On an FHA Loan mortgage insurance rates are set by HUD and based on the down payment amount. For home loans with 10% or more down the mortgage insurance rate is 0.85% for home loans with less than 10% down the mortgage insurance rate is 1%. To calculate the mortgage insurance payment you multiply the base loan amount by the mortgage insurance rate and divide by 12. (Base Loan Amount x Mortgage Insurance Rate) / 12