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. |
