Estimate Your Mortgage Payment

Find out what are the prevailing rates, required down payment percentages, and loan terms. Then take out your calculator and fill in the blanks—in pencil.

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15 years 20 yearsINTEREST RATE
Multiply the monthly payment per thousand dollars x number of thousands borrowed. For example, $85,700 borrowed for 15 years at 5%:
thousands borrowed payment per thousand dollars Monthly mortgage payment.
Barb Woodham
Call Me….Let\’s talk Real Estate! 314-346-BARB (2272)
Every mortgage lender structures charges to the borrower differently, and the allocation of specific charges between buyer and seller varies widely from locality to locality depending on prevailing customs and practices. No buyers will have to pay all the charges listed, and every buyer will probably have to pay something that\’s not listed. Most purchasers have been presented with a good faith estimate of closing costs called a RESPA statement and a document from their attorney or the closing firm itemizing closing charges.
Earnest money or deposit Interest points charged by the lender Loan assumption fee Loan origination or discount fees Prepaid Mortgage insurance Credit report Appraisal Property survey Initial mortgage payment Inspections of property Recording fees Prepaid homeowner\’s insurance for first year Prorated property taxes Attorney\’s fees Title search and insurance State and local closing taxes and fees Down payment (down payment less
Make financial arrangements (mortgage, transfer funds, etc.).
Purchase homeowner\’s insurance.
Have property surveyed unless mortgage lender has arranged this.
Arrange for termite or other inspection.
Make a final walk-through.
Know your closing costs (see RESPA statement).
Have bank check prepared for closing, as required.
Barb Woodham
Call Me….Let\’s talk Real Estate! 314-346-BARB (2272)
Before you set out on a house-hunting foray, you should know what price range is realistic for you. To be considered for a mortgage, you generally have to meet two conditions before there\’s even a credit check: You must be able to handle the monthly payment of principal, interest, taxes, and insurance (PITI), and you must have an adequate down payment. Although the criteria for these vary, you can get a rough idea of what many lenders think you can afford from the worksheet below. Find out what are the prevailing rates, required down payment percentages, and loan terms. Then take out your calculator and fill in the blanks”in pencil. Column A
Annual income before taxes (gross): Divide by number of months: Monthly gross income: (Record it in both columns. Perform operations only on figures in the same vertical column.) Many lenders will not allow you to spend more than 28% of your monthly gross income on housing expense: (column B) Maximum monthly housing expense allowance (column B): Many lenders allow 36% of monthly gross income for long-term debt: Long-term monthly expense allowance: Figure out your monthly long-term obligations below, and subtract it from the allowance: child support $ auto loan + credit cards + association fees + other + total long-term obligations: = Monthly housing expense allowance: Look at the last amount in columns A and B. Record the smaller amount: About 20% of the housing expense allowance is for taxes and insurance, leaving 80% for payment of mortgage (principal and interest): Allowable monthly principal and interest expense: Divide by MONTHLY PAYMENT PER THOUSAND DOLLARS from Estimate Your Mortgage Payment document Multiply by 1000: Affordable mortgage amount (what the lender will lend):
In addition to the mortgage you borrow from a lender, normally you will be required to make a down payment a percentage of the purchase price you must pay in cash. A standard down payment is 20 percent of the purchase price, but it could be almost any amount, depending on the requirements of your lender. You can afford a house that is the total of your affordable mortgage amount plus the down payment.
Barb Woodham
Call Me….Let\’s talk Real Estate! 314-346-BARB (2272)

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