Mortgage Calculator
Calculating your mortgage payment
Redfin’s mortgage calculator estimates your monthly mortgage payment based on a number of factors. Your mortgage payment includes your principal and interest, down payment, loan term, homeowners insurance, property taxes, and HOA fees. This gives you the ability to compare a number of different home loan scenarios and how it will impact your budget.
What is a property tax?
As a homeowner, you’ll pay property tax either twice a year or as part of your monthly home payment. This tax is a percentage of a home’s assessed value and varies by area. For example, a $500,000 home in San Francisco, taxed at a rate of 1.159%, translates to a payment of $5,795 annually.
What is a jumbo loan?
A jumbo loan is used when the mortgage exceeds the limit for Fannie Mae and Freddie Mac, the government-sponsored enterprises that buy loans from banks. Jumbo loans can be beneficial for buyers looking to finance luxury homes or homes in areas with higher median sale prices. However, interest rates on jumbo loans are much higher because lenders don’t have the assurance that Fannie or Freddie will guarantee the purchase of the loans.
How much is homeowners insurance and what does it cover?
Homeowners insurance is a combination of two types of coverage:
- Property insurance protects homeowners from a variety of potential threats such as weather-related damages, vandalism, and theft.
- Liability insurance protects homeowners from lawsuits or claims filed by third parties for accidents that happen within the home.
The cost of a homeowners insurance policy will vary depending on the type of property being insured (e.g. condominium, mobile home, single-family residence, etc.) and the amount of coverage the owner desires. Lenders require that buyers obtain homeowners insurance in order for the insurance premium to be included in the monthly mortgage payment. A mortgage calculator gives an estimate of your potential cost, but talk to an insurance company to determine the exact amount.
What is a mortgage interest rate and APR?
Mortgage Interest Rate
The mortgage interest rate is the amount charged by a lender in exchange for loaning money to a buyer. It is a yearly percentage of the total loan amount and is calculated into the monthly mortgage payment
Annual Percentage Rate (APR)
APR (%) is a number designed to help you evaluate the total cost of a mortgage. In addition to the interest rate, it takes into account the fees other costs you may encounter over the life of the loan. The APR is calculated according to federal requirements and is required by law to be stated in all home mortgage estimates. This allows you to better compare how much mortgage you can afford from different lenders and to see which is the right one for you.
What is Private Mortgage Insurance (PMI)?
Mortgage insurance protects the mortgage lender against loss if a borrower fails to pay on a loan or commonly known as defaults. Private mortgage insurance (PMI) is typically required for borrowers of conventional loans with a down payment of less than 20%. Once you’ve paid down the mortgage balance to 80% of the home’s original appraisal value you are able to ask your mortgage service to remove PMI.