Mortgage Calculator
A mortgage calculator is a valuable tool that helps individuals estimate their monthly mortgage payments based on factors such as loan amount, interest rate, and loan term. By inputting these variables into the calculator, users can quickly determine how much they can expect to pay each month toward their mortgage principal and interest. This allows prospective homebuyers to assess their budget and affordability before committing to a home purchase. While mortgage calculators typically do not include taxes or insurance in their calculations, they provide a convenient and efficient way for users to gain insight into their potential mortgage obligations and make informed decisions about their housing finances.
Closing costs explained
When it comes to your money, it’s never a good feeling to be caught off guard. No one likes to be surprised by a high utility bills, or hit with an unexpected late fee. Far better to know what’s coming in advance so that you can plan for it and prepare yourself mentally to avoid depleting your bank account. This is certainly true of buying a home. Before taking on a mortgage and buying a house, most people want to know everything they can about how purchasing a home will impact their finances.
There’s one number in the home-buying process that is especially hard to pin down: Closing costs. The best guess most financial advisors and websites will give you is that closing costs are typically between 2% and 5% of the home value. True enough, but even on a $150,000 house, that means closing costs could be anywhere between $3,000 and $7,500 – that’s a huge range! While your lender is required to provide a loan estimate explaining your closing costs within three days of submitting your loan application, that often occurs when you have already selected a home and are trying to finalize a deal. Not a great time to learn about thousands of dollars in fees you didn’t see coming.
Part of the reason closing costs (also called settlement costs) are so difficult to determine ahead of time is that they aren’t a one line item, but rather a collection of different expenses that arise for multiple reasons. Some depend on the state in which you’re buying your home, others on the county. Some are related to your lender and the type of mortgage you’re getting, and some have to do with the real estate professionals who are helping you get your deal done. In all, closing costs are a messy amalgam of variable fees.
A closing costs calculator like ours lets you see closing costs based on the specifics of your financial situation. Below, we’ll take you through each one line by line, so you can understand what you’ll be paying for.
The government has come up with rules that lenders must follow when it comes time to reveal estimated closing costs to people who are shopping for a mortgage. The government-mandated closing costs form is called a loan estimate (formerly known as a good faith estimate).
When you look at a loan estimate, you’ll see a break-down of closing costs. Some of these will be listed as loan costs. This means that they’re directly related to the cost of providing you with a home loan. Of these costs, some carry a fixed price and some are services you can shop for if you want to try to get a better deal.
Rule of thumb for calculating closing costs?
Home buyers should expect to pay between 3 – 5% of the purchase price of their home in closing costs. So, if your home cost $150,000, you could pay anywhere between $4,500 and $7,500 in closing costs.