# How Much Can You Afford?

Check out current rates, estimate your mortgage, and learn how it works.

### Mortgage Calculator.

Use our mortgage calculator to estimate your monthly payments.

\$

10%

1%

5%

\$
\$

## \$1421

### Monthly Payment

Principal & Interest \$1421

Monthly Taxes \$1421

Monthly HOA \$1421

Monthly Insurance \$1421

### Mortgage Rates.

View the current mortgage rates for WA.

Please note that rates may be up to 48 hours behind. For up to the minute rates contact us today!

### Calculating a mortgage payment

• If you’re buying a home, enter its price under “Purchase Price.”

• Select the number of years in the “Mortgage Term.”

• Then, adjust the “Down Payment” percentage accordingly to reflect its amounts. Down payment is what you pay upfront.

• Next, adjust the “Annual Taxes” and the “Interest Rate” percentages to reflect the right figures.
• Lastly, enter your “Annual Insurance” and Monthly HOA (Home Owners Association).

### The formula for determining a mortgage payment:

If you wish to crunch the figures manually, here’s the formula to assists you:

M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]

What do all those letters mean?

M =

monthly mortgage payment

P =

the principal amount

I =

monthly interest rate. Be sure to first change annual interest rates into a monthly figure by dividing by 12.

N =

the number of monthly payments over the mortgage’s life. So if you get a fixed-rate mortgage whose life is 30 years, n= 30 years x 12 months = 360 payments

### The right mortgage term length

With a 30-year fixed-rate home loan, your monthly payment will go down, but the total interest over the loan’s life will increase. On the other hand, a 15-year fixed-rate home loan lowers the total interest but increases your monthly payment.

### If an ARM makes sense.

Here, the initial constant rate acts as a “teaser” before changing into a floating rate for the rest of the loan’s period. Are you planning to stay in the home for just a few years? Consider a 5/1 ARM. Be sure to know how the amount of your monthly payment can change at the end of the teaser rate, especially if there’s an upward trend in interest rates.

### If you’re paying too much

With the calculator, you get to know expected monthly payments after taking into account all the costs: think PMI, taxes, and other insurances

### If your down-payment is just enough

It’s now easier to pay just a small down payment- as low as 3%. The calculator is your best friend in deciding the right amount to put down.

### How do mortgage lenders determine the amount you can afford?

Lenders usually assess if you can repay the mortgage. Your debt-to-income ratio is the main factor they consider.

What’s it? It’s the percentage of your income (before tax) that goes towards paying your monthly dues, including car debts, child support, mortgage, and minimum credit card payments. Lenders will consider you more favorably if you have a 36% or less debt-to-income ratio.

### Typical costs in a mortgage payment

Below are the essential components of the monthly mortgage payment:

### Principal

The borrowed amount. It reduces as you continue paying the monthly payments

### Interest

The percentage of the total loan that the lender charges to lend money.

### Property Taxes

The annual tax deducted by a government authority on your land or home: (You pay about 0.5-1.5% of your tax with every monthly payment. The lender saves them, usually in an escrow account, and pays when property taxes are due.

### Homeowners insurance

An insurance policy that covers financial losses and damages on your home due to theft, storm, fire, and other issues.

### Mortgage insurance

When your down payment is under 20% of the purchase price, you’ll be required to pay mortgage insurance. This insurance helps protect the lender if you default on the loan.

If you belong to HOA, the mortgage insurance is billed directly – separate from the monthly mortgage payment. Seeing that such bills are forgettable, we include them in our calculator.

### Apply Now to Get Pre-Qualified.

Peace of mind in a just a few clicks.