Definitions:
Annual income - Your annual income.
For married couples this is your total combined annual
income.
Purchase price - The price of the
home you wish to purchase. This is the actual price
you'll pay, not including any closing costs.
Total monthly payment - Total monthly
payment that you can qualify for. This is the total
of principal, interest, taxes and insurance paid each
month. Often called PITI.
Cash on hand - Cash you have for the
down payment and all 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. The most common
mortgage terms are 15 years and 30 years.
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 in for homeowner's insurance.
Monthly car payment(s) - Total monthly
payment for your car loan(s).
Credit card payments - Total monthly
minimum payments for your credit cards.
Other loan payments - Any other installment
loan payments, such as student loans or unsecured loans.
Total closing costs - Total up front
costs to close your loan. This is the total of your
loan origination fee, points paid and other closing
costs.
Loan origination rate - The percentage
the lending institution charges for its origination
fee. 1% for a $100,000 home equals $1,000.
Number of 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.
Monthly PMI payment - Monthly cost
of Principal Mortgage Insurance (PMI). For loans secured
with less than 20% down, PMI is estimated at 0.5% of
your loan balance each year. Monthly PMI is calculated
by multiplying your starting loan balance by this percent
and dividing by 12. When your loan balance exceeds 20%
of the original purchase price, your PMI payment drops
to zero.
Monthly PI payment - Monthly principal
and interest payment.
Total for down payment - Total funds
remaining, after closing costs, for down payment.
Limit down payment to 20% - Limit
down payment to 20% of the purchase price, even if you
have more cash on hand than required for closing costs
and a 20% down payment.
Show schedule by month - Display the
payment schedule by month when you press the Payment
Schedule button.
Show schedule by year - Display the
payment schedule by year when you press the Payment
Schedule button.
Total debt percent of annual income
- Not shown. This is the percent of your annual income
your financial institution allows you to use for installment
payments debt. This includes car payments, credit card
payments, other loan payments and your "Principal,
Interest, Tax and Insurance" payment for your home.
The default rate is 36%.
PITI percent of annual income - Not
shown. This is the percent of your annual income your
financial institution allows you to use for your "Principal,
Interest, Tax and Insurance" payment for your home.
The default rate is 28%.
Qualify amount - Shown as "Total
monthly payment." This is the total amount you
qualify for per month. This amount is the total of "Principal,
Interest, Tax and Insurance" for your home.
Loan Application
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