| Definitions |
| |
| 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 misc. fees paid.
|
| Total closing costs: |
Total up front 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: |
Annual percentage return you would receive if you invested your closing costs and down payment
instead of purchasing a home.
|
| Monthly rent payment: |
Amount you currently pay for rent per month. |
| Income tax rate: |
Your current marginal income tax rate. |
| Expected inflation rate: |
Inflation rate used to adjust amounts subject to annual increases. This includes 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 homes 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 paid per month for your home. Insurance includes PMI
and homeowner.
|
| 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 Principal 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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