Frequently Asked Questions

We use the standard amortization formula: M = P[r(1+r)^n]/[(1+r)^n-1], where P is loan amount, r is monthly rate, and n is total payments. Don't worry about the math, just enter your numbers and we'll calculate it instantly. Add property tax, insurance, HOA, and PMI in Advanced Options for your total housing cost.

Very accurate for estimates. Your actual payment may differ by a few dollars due to lender rounding and escrow calculations. Always confirm final numbers with your lender.

It shows how each payment splits between principal and interest. Key insight: early payments are ~70% interest, but by year 20 it flips to ~70% principal. This is why extra payments early have the biggest impact.

Private mortgage insurance (PMI) commonly applies to conventional loans when your down payment is under 20%. Your actual premium depends on factors such as your loan-to-value ratio, credit profile, loan type, and insurer. Use the monthly PMI amount from your lender quote in the mortgage calculator to include it in your total payment.

For many conventional mortgages, you may ask your servicer to cancel PMI when the principal balance reaches 80% of the home's original value. You generally must request it in writing, be current with a good payment history, have no junior liens, and may need to show that the property has not declined in value. Extra principal payments can help you reach the 80% threshold sooner.

If you do not request cancellation, PMI generally terminates automatically when the balance is scheduled to reach 78% of the home's original value, provided you are current on payments. FHA mortgage insurance uses different rules, so check with your servicer before relying on these conventional-loan thresholds.

15-year: ~0.5% lower rate, saves $100k+ in interest, but 40% higher monthly payment.
30-year: Lower payments, more flexibility. You can always pay extra.
Use the calculator to compare with your actual numbers.

A lot. On a $400k loan (30yr): 6% vs 7% = $240/mo difference = $86,000 over the life of the loan. Even 0.25% saves ~$20k. Shop at least 3 lenders.

2-5% of purchase price, paid at closing. Includes: lender fees (~1%), appraisal ($500), title insurance (~0.5%), prepaid taxes/insurance. On a $400k home, expect $8k-20k. Budget for these separately from your down payment. They're due on closing day.

Minimum: 620 for conventional loans, 580 for FHA (with 3.5% down), 500 for FHA (with 10% down).
Best rates: 740+ gets you the lowest rates. Each 20-point drop can add 0.125-0.25% to your rate. Check your score for free before applying, and avoid opening new credit accounts in the months before.

Fixed-rate: Same payment for the life of the loan. Predictable and safe, best if you're staying 7+ years or rates are low.
Adjustable-rate (ARM): Lower initial rate (often 0.5-1% less), but adjusts after 5-10 years. Risky if rates rise, but smart if you'll move or refinance before the adjustment. Most buyers choose fixed for peace of mind.

Compare APR, not just rate. APR includes fees and gives the true cost. Also compare: origination fees, points (each point = 1% of loan), closing costs, and whether the rate is locked. Get at least 3 quotes, all within 14 days so they count as one credit inquiry. A 0.25% rate difference on a $400k loan saves ~$20k over 30 years.

The 28/36 rule: Housing ≤ 28% of gross income, total debt ≤ 36%. Example: $100k income = max ~$2,300/mo housing. But "approved for" ≠ "comfortable with." Leave room for life.

Yes, if: You can hit 20% (avoids PMI), you still have 3-6 months emergency fund, and you're not giving up employer 401k match to do it.
No, if: It drains your savings or delays buying in a rising market.

Math says: If your rate < expected investment returns (~7% historically), invest instead.
Reality: Paying off the mortgage is a guaranteed return and feels great. No wrong answer here, it's about your risk tolerance and sleep quality.

Your county multiplies your home's assessed value by its local tax rate. If the assessed value is $300,000 and the rate is 1.2%, the annual bill is $3,600, about $300 a month. Most lenders collect that monthly amount in escrow with your payment and pay the bill for you. Rates vary widely by state and county: see our property tax guide or pick your state from the state calculators for local figures.

Five numbers get you an accurate payment: home price, down payment, interest rate, loan term, and your local property tax. Add home insurance, and PMI if you are putting down less than 20%, for the full monthly picture. If you do not know today's rate, the calculator loads the current weekly average for you, and each state page prefills local taxes and typical home prices.

Add four pieces: principal and interest, property tax (roughly 1% of home value per year in many areas, higher or lower by state), home insurance, and PMI of about 0.5% to 1.5% of the loan per year when you put down less than 20%. On a $400,000 home with 10% down at recent rates, that lands near $2,900 to $3,200 a month all-in. The calculator itemizes each piece for your exact numbers.