Buyers Resources

Real Estate Mortgage Calculator

It's a common misconception that there are only a few loan options available to home buyers. In fact, there are something like 200 different loan options you could use to purchase a home! Obviously, not every loan works for every buyer, but still... With so many options, how do you know which loan will be right for you?

Take some time to familiarize yourself with some of the more common loan options available to Triangle home buyers, then use our handy mortgage calculator to estimate your monthly payments and determine how much home you can afford.

Jump to Mortgage Calculator

First, Determine How You'll Pay Interest

Before you get started learning about loan types, you might want to take some time to read up on interest rate options, because, yes, you've even got choices for those. Here are the three most common interest rate options in modern mortgages.

Fixed-Rate
Mortgage

  • Interest rate remains the same throughout the duration of the loan
  • Payments remain the same throughout the duration of the loan
  • Very predictable monthly payments

Adjustable-Rate
Mortgage

  • Interest rates may start out lower for a set period, then flux to match current interest rates
  • Rates may increase or decrease depending on the economy
  • Monthly payments are unpredictable and may increase or decrease

Two-Step
Mortgage

  • Also called 5/25s or 7/23s
  • Offers an initial fixed interest rate for the first 5 to 7 years, then converts to current market rates
  • Can be convertible (buyer can choose another fixed-rate loan) or nonconvertible (automatically switches to adjustable)

Next, Choose Your Loan

Now that you've got an idea of the interest rates that might work best for you, it's time to take a look at some of your loan options.

Conventional
Mortgage

  • Usually 15, 30, or 30-year duration
  • Can be fixed-rate or adjustable
  • Typically has strict income and credit qualifications and requires a 20% down payment

USDA Rural
Housing Loan

  • Targeted to buyers searching in designated "rural" towns (but the definition of "rural" is loose)
  • As little as 0% down payment
  • Targets buyers with "steady, low, or modest" income

FHA
Mortgage

  • Backed by the government and has more flexible income and credit requirements
  • Down payments as low as 3 – 5%
  • Requires mortgage insurance and may have higher interest rates

VA
Loan

  • Available to almost all military service members and veterans
  • Require as little as 0% down payment and have more flexible income and credit requirements
  • Does not require mortgage insurance but may require a one-time funding fee (depending on veteran)

Balloon
Mortgage

  • Has a short term of 5 – 7 years, but monthly payments based on a 30-year loan
  • At the end of the loan, borrower must pay off the balance, refinance, sell, or convert the mortgage
  • May have lower interest rates and easier qualification requirements

Shared-Appreciation

  • Buyers get below-market rates in exchange for a share of the profits at the time of sale
  • Lender doesn't make money unless the buyer does, but buyers can lose out on profits if homes sells for more
  • Often used to help low-income families purchase homes

Lastly, Calculate Your Mortgage

So, you've got some ideas of what your loan might look like. Now play around with our monthly mortgage calculator to estimate your monthly mortgage payments. Not only will this help you budget and get prepared, but it'll also help determine the price range for your home search.

Start Your Calculation

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