Loan Calculators

For example:
If you are comfortable with a monthly payment of $1500 per month  and the taxes (in the area that you like) average $3000 per year (or $250/mo), and the insurance runs around $600 per year ($50/mo), then your mortgage payment would have to stay around $1200.

$1,200.00  principal and interest
$   250.00  property taxes
+ $     50.00   homeowners insurance
$ 1,500.00 payment

At the current 30 year fixed rate of  5.375% interest, if you spent $1200.00 you could finance about $214,300.   This only works if you are putting down more than 20% of the Purchase Price, otherwise there will be one more charge here for private mortgage insurance which could run $90/mo on a $214,300 loan)

Decide how much of a down payment you can afford. Although you can put any amount down you choose, when most lenders quote rates they break the loans into some categories categories. These are  96.5%, 95%, 90%, 80%, and 75% loan to value.

PRIVATE MORTGAGE INSURANCE (or PMI) is an insurance policy that lenders require Purchasers to get when they put down less than 20-25% of the Purchase Price. Depending on which loan you choose and your credit score, they charge you different amounts of mortgage insurance. If you put 20-25% down (or more) the normally do not charge any mortgage insurance. With down payments less than that, they do charge mortgage insurance. If you are between 5 and 10% down you get the 5% rate. Between 10 & 20% down you get the 10% rate etc.  The general rate for the mortgage insurance is from .5% to .8% of the loan amount per year (divide by 12 for the monthly payment). Conventional lenders call this PMI or “private mortgage insurance” and FHA (government loans ) call this MIP or “mortgage insurance premium”.