Before you begin the mortgage application process, it’s essential to be aware of what to expect. The loan application can take weeks and you’ll need to provide documentation regarding your income, debts and assets.
Once your loan application is submitted, an underwriter will assess your risk. Be prepared to answer any questions and provide documents promptly when requested.
Closing Costs Calculator
Homebuyers often overlook the closing costs that come with purchasing a home, but these amounts can add up to anywhere from 2%-5% of the overall home price – an amount that amounts to substantial money.
By taking time to understand and anticipate these fees, you can feel more at ease when making a purchase. Furthermore, it’s wise to shop around and negotiate any high charges that arise.
Within three days of applying, your lender will provide a loan estimate outlining all fees you must pay at closing. About three days before closing on the home, they will issue a closing disclosure which lists all expenses involved in the loan process.
The closing costs calculator below helps you estimate the expense of these fees. It provides a breakdown in both dollars and as a percentage of your home’s value, so that you can plan for your mortgage with sufficient cash reserves.
Costs may differ based on lender and location, so it’s always wise to shop around before selecting a loan provider. You may even save on these expenses if you qualify for VA or FHA loans which typically offer lower interest rates than conventional loans and don’t require any down payment.
In addition to loan and title fees, closing costs include appraisal fees, private mortgage insurance and homeowners insurance. Depending on your lender, these charges could amount to anywhere from 0.5% to 1% of the home’s purchase price.
This calculator can help you estimate closing costs based on your loan type and property location. Additionally, ask your real estate agent for an estimate of these fees.
No matter where you reside, your lender must provide you with a closing disclosure no later than three days before the home closes. This form must be written in an organized format and include an itemized breakdown of each of your closing costs; this form provides the most precise way to calculate total closing expenses before you close on your house.
Points Calculator
Points are an upfront fee you pay to reduce your mortgage interest rate. Usually, points cost 1% of the total loan amount and can reduce monthly payments by 0.25 percent; however, exact percentages may differ by lender.
Purchasing points on a mortgage can be beneficial if you plan to stay in your home for several years. It could save you thousands of dollars in interest over the life of the loan if you can afford to pay them off.
If you’re uncertain whether or not buying points is a wise move, a mortgage points calculator can help determine when the interest savings from points will exceed their costs. The calculator uses information entered on your loan to calculate what’s known as a break-even point – that is, when saving or spending enough money to purchase points minus their associated fees.
Calculating the break-even point on a loan involves comparing its annual interest rate, how long you plan to live in your home without refinancing, and when you expect to save or spend that money with points. To calculate this figure, click “calculate” and enter all relevant information into the designated fields.
You have the option to finance points and save on interest. Doing so will alter the loan’s balance, potentially lengthening its payoff period by several months.
In addition to the calculation for breaking even with points, this calculator also provides a breakdown of your monthly payments. The savings from points will make up an important portion of the overall mortgage payment; however, keep in mind that these calculations don’t take into account any interest savings from other loan options you may have available.
When determining whether or not to purchase points, it’s wise to consider your housing plans and personal financial goals. If the goal isn’t necessarily related to owning a house – such as making a larger down payment or funding repairs – then skipping the points may be more advantageous.
Mortgage Calculator
Mortgage calculators are useful tools that let you estimate your monthly payment when purchasing a home. They calculate principal and interest as well as other associated costs with mortgages. This is an essential first step in the home-buying process since it enables you to determine how much you can afford.
Calculators can also assist in deciding if an adjustable-rate mortgage (ARM) is suitable for you. ARMs adjust their interest rates periodically, usually every six months or so. You might want to take into account an ARM if planning on moving within a few years or need the security of knowing your rate will remain fixed for an extended period.
Once you enter the information for your loan term and home price, the mortgage calculator will generate a monthly payment breakdown. This includes both principal and interest payments as well as taxes, insurance and homeowners association (HOA) fees if applicable.
You can adjust the inputs to see how different scenarios affect your payments. For instance, switching from a 30-year mortgage to 15-year might save you interest over the life of the loan.
Furthermore, a mortgage calculator will indicate when you will reach 20 percent equity in your home – at which point you can request that the lender waive private mortgage insurance. This can be an enormous advantage if you haven’t saved up a substantial down payment for purchase.
Finally, the calculator can also calculate how much extra you must pay each month to pay off your mortgage by a certain date. With this feature, you can make either monthly, annual or one-time extra payments to reduce the length of your loan and reduce interest costs.
Finding a mortgage can be an intricate and stressful process. But with the help of a mortgage calculator, you can simplify the procedure and make budgeting for your new home much simpler. Furthermore, using this tool gives you insight into your overall financial picture, including how changes to any of the five primary variables in a mortgage transaction will affect your final cost.
Loan Calculator
The loan calculator is an invaluable tool that can help determine how much you can afford to borrow and how long it’ll take to pay off your mortgage. It also shows how your payments compare to others’ and what would happen if interest rates on similar type of loans varied.
Calculating your monthly mortgage payment requires taking into account the loan amount, your credit score and mortgage interest rate. Furthermore, the loan calculator will take into account any recurring costs such as property taxes or home insurance, in addition to non-recurring ones like annual percentage increases (APRs).
Your monthly payments will be determined by a combination of current debts, such as credit cards, auto loans, student loans, child support or alimony obligations, plus other recurring costs due each month. After deducting these from your monthly income, the remaining amount available to you in cash is known as available cash flow.
If your lender charges an origination fee, add it to the loan amount when using your calculator. Lenders may deduct this from your disbursement or include it in total cost of borrowing.
Contrary to fixed rate loans, where the interest rate remains fixed throughout the life of the loan, compound interest increases based on your original principal plus accrued interest from previous periods. This compounding occurs on most types of loans such as auto loans and mortgages.
Use our loan calculator to estimate your monthly payments on either a fixed-rate or amortizing mortgage. In addition to other factors, the loan calculator also helps you estimate long-term interest costs – useful when refinancing.
The loan calculator will give you an estimated total amount owed at the end of your loan, including any interest and other fees. To use it, enter the amount of your mortgage loan, interest rate and term into the fields on the left sidebar and click Calculate; results will be displayed below.
