- Price of home
- Purchase price of the home you wish to buy.
- Cash on hand
- Cash you have for the down payment and closing costs.
- Interest rate
- The current interest rate you can receive on your mortgage.
- Term in years
- The number of years over which you will repay this loan.
- Property tax rate
- Your property tax rate. 1% for a $100,000 home equals $1,000 per
year in property taxes.
- Home insurance rate
- Your homeowner's insurance rate. 0.5% for a $100,000 home equals
$500 per year for homeowner's insurance.
- Loan origination rate
- The percentage the lending institution charges for its origination
fee. 1% for a $100,000 home equals $1,000.
- Points paid
- The total number of points paid to reduce the interest rate of your
mortgage. Each point costs 1% of your mortgage balance.
- Other closing costs
- Estimate of all other closing costs for this loan. This should
include filing fees, appraiser fees and any other miscellaneous fees
paid.
- Total closing costs
- Total upfront costs to close your loan. This is the sum of the loan
origination fee, amount paid for points and other closing costs.
- Total for down payment
- Total funds remaining for down payment.
- Mortgage amount
- Total amount of loan.
- Investment return
- The rate of return you could receive if you invested your closing
costs and down payment instead of purchasing a home.
The actual rate of return is largely dependant on the type of
investments you select. From January 1970 to December 2003, the
average compounded rate of return for the S&P 500, including
reinvestment of dividends, was approximately 11.7% per year. During
this period, the highest 12-month return was 64%, and the lowest was
-39%. Savings accounts at a bank pay as little as 1% or less. It is
important to remember that future rates of return can't be predicted
with certainty and that investments that pay higher rates of return
are subject to higher risk and volatility. The actual rate of return
on investments can vary widely over time, especially for long-term
investments. This includes the potential loss of principal on your
investment.
- Monthly rent payment
- Amount you currently pay for rent per month.
- Income tax rate
- Your current marginal income tax rate.
- Expected inflation rate
- What you expect for the average long-term inflation rate. This has
been calculated by the Consumer Price Index from 1925 to 2002 to be
3.1%. Inflation rate is used to adjust amounts subject to annual
increases. These amounts include rent, insurance and tax payments.
- Home appreciates at
- Annual appreciation you expect in the home you are purchasing.
- Future sales commission
- The percent of your home's selling price you expect to pay to a
broker or real estate agent when you sell your home.
- House payment
- Total of principal, interest, taxes and insurance (PITI) paid per
month for your home. Insurance includes Principal Mortgage Insurance (PMI)
and homeowner's insurance.
- Principal payment
- Total of principal paid per month on your mortgage.
- Tax savings
- The value of the tax deduction you receive on your mortgage's
interest and home's property taxes. For example, if you have $900 in
interest and $100 property taxes per month, the value of the tax
deduction would be $280. (At a tax rate of 28%).
- Net house payment
- Your house payment minus the value of the tax deduction and
principal payment.
- Net home price
- Net selling price of your home after subtracting any sales
commissions.
- Monthly PI
- Monthly principal and interest payment.
- Monthly PMI
- Monthly cost of Private Mortgage Insurance (PMI). For loans secured
with less than 20% down, PMI is estimated at 0.5% of your loan balance
each year.
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