Purchase Mortgage Calculator

Closing costs are fees paid to the lender when closing on a loan. They are made up of expenses incurred to successfully underwrite the loan as well as fees to cover the costs of originating the loan. Closing costs can be paid up front or in some cases, can be rolled into the loan itself.

Depending on the loan, there may be costs beyond standard processing charges. Many lenders base loan-level price adjustments (LLPAs) on borrower eligibility or other loan features, like credit score, loan purpose, occupancy, number of units, etc. Other lenders use these same criteria to determine interest rate.

Other money due at closing can include prepaid amounts toward the establishment of a new escrow account, taxes, and money used to buy down an interest rate. When comparing loans, reviewing the closing costs and how they are to be paid is an important step in finding the right loan for your situation.

CapCenter's calculator shows you our fees, if any, side-by-side with the typical industry average fees. CapCenter is proud to offer many Zero Closing Costs options with low interest rates especially for primary home loans.

The interest rates published daily by banks represent an annual interest rate, which is the amount of total interest to be paid every year – you can use these numbers to calculate an annual percentage rate (APR). To determine how a rate affects your home loan, you will have to determine how that rate breaks out into monthly calculations.

While it is common to understand a lower interest rate as better than a higher one, this question is not always so straightforward. Loan costs are a huge factor when considering a home loan and often affect the overall APR, which negatively influences your total monthly payment. It can be more useful to understand the interest rate as a starting point.

Your mortgage payment will include principal, interest, taxes, and insurance, often referred to as PITI. Depending on your equity and/or loan program, you may also be required to pay mortgage insurance as part of your monthly payment. The loan amount, term, and interest rate determine what you owe toward principal and interest.

Taxes and insurances are typically collected monthly into an escrow account. This allows a mortgage company to pay those bills on your behalf when they come due.

What you can afford depends heavily on your monthly income and any monthly debt payments. The comparison of these amounts is how lenders determine your debt-to-income ratio (DTI). Your DTI includes all monthly rolling debts – including set payments toward things like cars and credit cards. When a lender considers how much mortgage you qualify for, they consider these debts along with how much the mortgage will add to your monthly payment total to make sure you are under a predetermined threshold. Different loan types have different DTI guidelines.

The answer to this question is based on many variables. Loan amount is just the beginning – the amount financed needs to be settled before terms can be considered and amortization can be scheduled. From there, interest rate, APR, and loan term are crucial. A shorter loan term – say 15 years – is going to require a higher monthly payment than a pay schedule stretched over 30 years. Interest rate and APR determine how much money is added to the principal payment toward interest on a monthly basis.

Most borrowers deposit money into escrow monthly. Escrow amounts go toward hazard insurance and property tax payments. Depending on your down payment and the home's value, you may have to pay mortgage insurance, which will increase your monthly payment. None of these charges are set by the mortgage company. Private companies originate mortgage and hazard insurance policies and local governments set property tax rates.

An important element when looking at your mortgage creditworthiness is your credit score. Credit scores are determined by the credit bureaus and are calculated using several different factors. The number of current open credit accounts, the payment history on those accounts, and the utilization of those credit limits are all considered when calculating a credit score. Someone who has never taken on debt before is unproven in their ability to make payments on time, and in that case will not yet have a credit score that can be used in mortgage qualification.

If you’re looking at a home purchase as your first major debt, it is possible you do not have any credit history established. It is possible to purchase a house in this situation, but it is not likely you will be able to do so alone. Instead, you will probably have to include a co-signer who has good to excellent credit.

These terms sound similar, but are distinct. A prequalification is a simple preliminary determination on whether, and for how much, you would qualify for a loan under the lender’s standards. This can be based on similar criteria the institution uses to qualify applicants.

A pre-approval, on the other hand, is generally understood as an offer of credit based on a more comprehensive review of your creditworthiness. It is common for someone applying for a pre-approval to detail and verify their income, assets, and other relevant information as usually required in a normal credit evaluation.

Both a prequalification and pre-approval are used to show a seller your ability to secure financing. The CFPB suggests that you don’t worry too much about which word a lender uses. What is important is that the prequalification or pre-approval letter you receive provides enough information for sellers in your area to take it seriously. The best way to make sure that the letter you have will serve its purpose is to ask a local real estate agent.