Buyer Tools

Buyers Financial Tools

Mortgage Payment Estimator – Conventional Payment

By entering a mortgage amount, interest, and term, a mortgage payment is easily determined. If the taxes and insurance are known, the full payment, principal, interest, taxes and insurance is determined. Private mortgage insurance will be added if the loan-to-value is in excess of 80%.

  • FHA Payment
    By entering a mortgage amount, interest, and term, a mortgage payment is easily determined will include the MIP. If the taxes and insurance are known, the full payment, principal, interest, taxes and insurance is determined.
  • VA Payment
    By entering a mortgage amount, interest, and term, a mortgage payment is easily determined. If the taxes and insurance are known, the full payment, principal, interest, taxes and insurance is determined.

Rent vs. Own

This shows a buyer the advantages of tax savings, appreciation, and principal reduction to lower the cost of owning a home.

Initial Qualifier

This calculates the maximum mortgage amount based on qualifying ratios for a particular type of loan. Other factors not considered in this form determine whether a person qualifies for a loan that are not considered in this form such as credit score, references, length of credit, ability to repay, and the property’s ability to secure the loan.

Homeowner’s Analysis

This calculates the tax advantages and investment potential of homeownership while taking into consideration the standard deduction that a person is entitled regardless of owning a home. This analysis assumes that the home is purchased on January 1 so that a full year’s interest and property taxes are deductible.

Equity Accelerator

This calculates the interest and time savings by applying additional principal contributions each payment.

Adjustable Rate Comparison

This will compare an adjustable rate mortgage against a fixed rate mortgage to determine when the savings from the ARM will be exhausted in an effort to help the buyer determine the mortgage that will provide the least cost of housing. It assumes that the rate will adjust the maximum amount at each possible period.

Buyer’s Closing Costs Worksheet

This is to serve as a preliminary estimate of the amount of cash you’ll need for the down payment and typical closing costs in general.

Cost of Waiting to Buy

This shows a buyer what can happen to the payment if while they are waiting for the price of the home to come down, the interest rate were to go up.

Your Best Investment

This compares the future value of the amount of money necessary for the down payment on a home using three possible alternatives: a certificate of deposit, a stock investment, and purchasing the home. The comparison involves different amounts of risk that are not measured in the example.

If the Rate Goes Up

This calculates the increased payment required that a rise in interest rate could cause.

Isn’t It Worth It

This is a powerful calculation that shows a buyer the monthly and daily cost of a slightly higher mortgage. The increased monthly payment may be insignificant to the overall purchase of the home that the buyer wants.

Interest Affects the Price

This shows the correlation in interest to price. It demonstrates that a .5% change in the rate is approximately equal to a 5% change in price.

2/1 Buydown

This illustrates how the home may be more marketable by offering financing concessions to the buyer rather than lowering the price. This is a fixed rate mortgage with the buyer qualifying at the note rate. The seller would be pre-paying the interest in advance. The buyer’s first year payment would be based on an interest rate 2% lower than the note rate. The second year’s payment would be based on an interest rate of 1% lower than the note rate. The remainder of the payments is at the note rate.

3/2/1 Buydown

This illustrates how the home may be more marketable by offering financing concessions to the buyer rather than lowering the price. This is a fixed rate mortgage with the buyer qualifying at the note rate. The seller would be pre-paying the interest in advance. The payments are calculated at 3% less than the note rate for the first year and 2% less for the second year and 1% less for the third year. The payments for the fourth and remaining years of the mortgage are at the note rate. The cost of the buy down is the difference in the payments in the first, second, and third years from what they should have been.

Financing Concessions

This form is meant to show an application of seller-paid funds toward a 2-1 Buy Down and Buyer closing costs.  This could be used to increase the marketability of a listing or to construct a buyer’s offer.

80/10/10 Comparison

This calculates the payments on the first and second mortgage that equal 90% and the blended rate which is compared to a 90% loan requiring PMI.  Most loans greater than 80% loan-to-value requires Private Mortgage Insurance.

A combination of an 80% first loan and a 10% second loan allows the buyer to only have 10% cash investment and avoid the expense of PMI.  The second loan could come from a conventional lending source or possibly from the seller.  It must be disclosed in the sales contract.

Will Points Make a Difference

Choosing between two loans with different interest rates can be difficult when there are other factors such as a different amount of points. This calculation develops a yield based on rate, points, and holding period to indicate which loan will have lower cost of housing.

Amortization Schedule

Investment Analysis

Investment analysis is an estimate of the possible outcomes resulting from the purchase and operation of rental real estate. While based on current Federal income tax laws, projections used for rent, expenses, appreciation and continued tax benefits for the investor and property can change during the holding period. Investing in rental real estate involves risk and investors should consider the possibilities carefully.

Assumption Comparison

The Assumption Comparison helps a buyer to determine the advantages of assuming a FHA or VA mortgage with a lower interest rate compared to originating a new mortgage at a higher, market rate. The savings on the assumption can be in lower principal and interest payments, equity growing faster and lower closing costs. The choice is purchasing the property with a new conventional loan or assuming the existing mortgage with possibly a second mortgage. This comparison assumes that the purchaser will put an equal amount down to assume the existing mortgage and get a second mortgage for the difference.

FHA MIP Release

The Annual Mortgage Insurance Premium on a FHA loan adds a considerable expense to a mortgage payment. It is cancelled when the loan-to-value reaches 78% of the original sales price. The date can be accelerated by making additional principal contributions to the loan. This app will serve as a tool to determine the required additional principal payments.

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