| Definitions |
| Price of home | The purchase price of the home you wish to buy. |
| Cash on hand | The cash you have for the downpayment 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 | An estimate of the property tax rate. Estimate the annual real estate taxes as a percentage of the home’s value. For example, entering 1% for a home valued at $100,000 equals $1,000 per year in property taxes. |
| Home insurance rate | Also known as your homeowner's insurance rate. Estimate the home insurance as a percentage of the home’s value. For example, entering 0.3% for a $100,000 home equals $300 per year for homeowner's insurance. |
| Loan origination rate | This is the percentage of the new mortgage amount that is paid to the lender as the loan origination fee. |
| 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 | The estimate of all other closing costs for this loan. This should include filing fees, appraisal fees and any other miscellaneous fees paid. |
| Total closing costs | The total up-front costs to close your loan. This is the sum of the loan origination fee, amount paid for points and other closing costs. |
| Total for downpayment | The total funds remaining for downpayment. |
| Loan amount | The total amount of loan. |
| Investment return | The annual percentage return you would receive if you invested your closing costs and downpayment instead of purchasing a home. |
| Monthly rent payment | The amount you currently pay for rent per month. |
| Income tax rate | An estimate of your current income tax rate. Use the chart below to estimate based on your Federal 2013 taxable income. Information about estimating your state tax rate can be found at http://www.taxadmin.org/fta/rate/ind_inc.pdf.
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Filing Status and Income Tax Rates 2013
|
|
Tax rate
|
Married filing jointly or Qualified Widow(er)
|
Single
|
Head of household
|
Married filing separately
|
|
10%
|
$0 - 17,850
|
$0 - 8,925
|
$0 - $12,750
|
$0 - 8,925
|
|
15%
|
$17,850 - 72,500
|
$8,925 - 36,250
|
$12,750 - 48,600
|
$8,925 - 36,250
|
|
25%
|
$72,500 - 146,400
|
$36,250 - 87,850
|
$48,600 - 125,450
|
$36,250 - 73,200
|
|
28%
|
$146,400 - 223,050
|
$87,850 - 183,250
|
$125,450 - 203,150
|
$73,200 - 111,525
|
|
33%
|
$223,050 - 398,350
|
$183,250 - 398,350
|
$203,150 - 398,350
|
$111,525 - 199,175
|
|
35%
|
$398,350 - 450,000
|
$398,350 - 400,000
|
$398,350 - 425,000
|
$199,175 - 225,000
|
|
39.6%
|
over $450,000
|
over $400,000
|
over $425,000
|
over $225,000
|
|
| Expected inflation rate | The inflation rate used to adjust amounts subject to annual increases. This includes rent, insurance and tax payments. |
| Home appreciates at | The annual appreciation you expect in the home you are purchasing. |
| Home 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 | The total of principal, interest, taxes and insurance paid per month for your home. Insurance includes mortgage insurance and homeowners insurance. |
| Principal payment | The total of principal paid per month on your mortgage. |
| Tax savings | The value of the tax deduction you receive on your mortgage interest and property taxes. For example, if you have $900 in interest and $100 property taxes per month, the value of the tax deduction would be $250. (At a tax rate of 25%) |
| Net house payment | Your house payment minus the value of the tax deduction and principal payment. |
| Net home price | The net selling price of your home after subtracting any sales commissions. |
| Monthly PI | Your monthly principal and interest payment. |
| Monthly PMI | The monthly cost of private mortgage insurance (PMI). For loans secured with less than 20% down, PMI is estimated at 0.9% 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 22% of the original purchase price, your PMI payment drops to zero. |
