Maria Ny Designs Home
About Maria Ny Designs
Breaking News
Online Portfolio
Writing Samples

Contact Maria Ny
Mortgage Calculator

Current National Rates

Mortgage Rates © ML

Purchase Price
Down Payment (%)
Loan term years
Interest Rate %
 
Estimated Monthly Mortgage Payments
Loan Amount
Principal + Interest
Monthly Taxes (%)
Hazard Insurance (%)
Mortgage Insurance (if LTV > 80%)
Total Payment
Loan to Value (LTV) %

How Much Home Can You Afford to Buy?

There is more to a mortgage loan than just the principal and interest. Other costs are involved in your monthly mortgage payment, including taxes, insurance and fees that your lender may charge for processing your loan. It's best to get an idea of how much you can afford BEFORE looking to buy a home than it is to end up with the embarassment of having your loan application declined. This way, you'll have a pretty good idea of what price ranges to shop, so you don't waste your time or the realtor's time shopping for a home you cannot afford. You may find that it's not yet time to shop for a home loan. But, it's better to find out this way than when it's too late and you find yourself facing a short sale or foreclosure.

Using the Mortgage Calculator

The mortgage calculator on this page will provide you with a ballpark estimate of what your mortgage loan balance will be upon the close of escrow and approximately how much you can expect to pay each month. It's a great way to help you determine how much home you can afford to buy because it also factors in taxes, hazard insurance and mortgage insurance (if you put less than 20% down).

To use the calculator, enter the purchase price, the down payment (or leave it blank if you have no down payment), the amount of time you plan to finance the house (in years) and the interest rate you expect to pay. Then, click the "Calculate" button. Your totals will show up in the bottom part of the form. The current national interest rates are displayed at the top-right part of this form. These rates reflect what a person with a FICO credit score of 700 or higher would pay. A person with a score between 680-699 should expect to pay about 1% more. Borrowers with lower credit scores than this should expect to pay probably 2% or more than the prevailing rate. A borrower with a credit score of less than 620 will more than likely not be approved for a home loan.

Mortgage Insurance

If the loan to value (LTV) on the house is more than 80%, meaning that you put less than 20% down, you are required to pay mortgage insurance (MI), also known as lenders mortgage insurance (LMI) and private mortgage insurance (PMI). The only exception to this is if you use a Veterans Administration (VA) loan to buy your home. However, you'll have to pay an up-front VA funding fee, which may be financed with your mortgage. But, if you are a disabled veteran, receiving a monthly disability pension, the VA funding fee is waived. Mortgage insurance premiums typically run at about $55/month for each $100,000 financed but can go as high as $1,500 per year or more. Many times, when the loan to value equals 80%, the mortgage insurance will be automatically dropped. Some lenders wait until the LTV is 78%. If your LTV is 78% or less and you are still paying mortgage insurance, you may have to request in writing to have it dropped. For more information on mortgage insurance premiums, ask your lender.

Mortgage insurance protects the lender. Many times, especially in today's real estate market, foreclosures and short sales yield quite a bit less than the original purchase price, and the lender is forced to take a loss on the property. Plus, there are costs involved with the foreclosure or short sale process. Mortgage insurance helps defray the costs incurred by the foreclosure or short sale process and some of the losses the lender may take due to the property selling at less than what the lender was owed on the mortgage.

Your Mortgage Insurance May Be Tax Deductible

If you are currently paying mortgage insurance, you may be in for some good news. A mortgage insurance tax deductibility provision in the Tax Relief and Health Care Act of 2006 was passed that provides homeowners who make up to $100,000 per household (or $50,000 for married homeowners filing separately) an itemized deduction for the cost of mortgage insurance. There is a partial deduction allowed for families with gross incomes up to $109,000.

According to the Internal Revenue Service (IRS), if you itemize deductions, you may deduct premiums paid for mortgage insurance provided by the Department of Veterans Affairs (VA), the Federal Housing Administration (FHA), the Rural Housing Service (Rural Housing), or private mortgage insurers in connection with a mortgage for the purchase of your primary residence only. Second homes, vacation homes, income property and other property you may own don't qualify. See the instructions and worksheet for IRS Schedule A, Line 13, to figure your deduction.

If you are a new homeowner, and you have prepaid mortgage insurance premiums, you may be able to deduct this entire amount, as well as any monthly premiums you paid over the year. FHA, VA and Rural Housing loans generally come with an upfront mortgage insurance fee that borrowers must pay. The upfront fee VA charges is called the VA funding fee and the one for Rural Housing is called a guaranty fee. Like private mortgage insurance premiums, you may be able to deduct the entire amount you prepaid. But, your home must be purchased between January 1, 2007 and December 31, 2010 in order to take advantage of this provision. Not everyone qualifies, so check with your tax advisor before trying to claim it.

Please Note

The information provided by this calculator is only an estimate. To find out the amount for which you may qualify and about specific details on loan programs available to you, contact a lender serving your area. For your privacy the information you enter on these screens is deleted when you leave this site.