Posted On: February 8th, 2010 by James Posted In: Mortgage Rates
Normally, I think online mortgage rate calculators are completely worthless. My beef with them has always been that borrowers first don’t know what rate they can expect. Mortgage rates change a little every day, and I think the last 6 months have seen rates change TWICE per day on average. But the real problem is that people don’t get the whole picture when they plug in what they think their loan amount and rate will be and calculate a payment. Generally, they are just getting the P+I portion of their payment (principal and interest)…. when what is the truly useful number to learn is the PITI payment (principal, interest, taxes, and insurance & sometimes PMI/mortgage insurance).
That is why I love the calculators found here at Oregon Mortgage Blog and our companion site Pdxhomeloan.com. First of all, they are right beside the US Average mortgage rate survey, so you can at least have a rough idea about what rates are available. I encourage users to plug in one of those rates when trying to estimate their own possible payments
Also – there is a place to insert your annual property tax figure, as well as your annual homeowners insurance figure to be calculated into the final payment! If you have a property in mind enter the property tax number where indicated. If you have no clue what that amount is, for an estimate, you could enter 1% of the purchase price as a place holder.
Also enter your annual homeowners insurance fee where indicated. If you have no clue what that will be, this figure usually ranges between $450-$800 annually. Perhaps you should use $600 as a place holder.
And here is where this mortgage calculator is really separated from the pack- it has a place to estimate your mortgage insurance! Mortgage insurance is a little tricky, and is mostly calculated based on how much money you put down. The more you put down, the less the mortgage insurance will be.
So here is what you would plug into that field:
- FHA purchase: 3.5% down payment – 1.15% MI
- Conforming loans: 5% down payment – 0.92% MI
- Conforming loans: 10% down payment – 0.43% MI
- Conforming loans: 15% down payment – 0.37% MI
Any scenario with 20% down or greater will NOT require mortgage insurance.
So, please refer to this post when estimating a payment for yourself. It will give you an amazingly detailed illustration of the entire life of the loan including amortization tables, and when the MI could fall off etc.
But don’t forget these are estimates! If you want to know the EXACT payment to expect, you should drop me a line. I will give you the best possible data to use for your home search.
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