About the Mortgage Estimator

The Mortgage Estimator employs basic rule of thumb guidelines and estimated values that cannot be known in a general sense. Each home purchase is unique and is dependant on many various factors. The mortgage estimator should not be relied upon to make any financial decisions. With this in mind, let's look at the factors that determine monthly payments and mortgage qualifications.

COST FACTORS
Down Payment - The down payment is the amount of cash you intend to invest up front towards the purchase of your house. This is NOT the total amount of money that you will need at the closing. You need to be prepared to pay prepaids and closing costs in addition to your down payment, which generally can run anywhere from 3% to 6% of the sales price. Again, this is on top of your down payment amount. So, if you have a total of $10,000 cash, be prepared to apply some of it towards your down payment, and some towards your prepaids and closing costs. A loan officer will be able to further explain these costs.

Insurance - Homeowner's insurance is provided by many insurance companies (see links below). This insurance is generally required by any mortgage provider.

PMI - Private Mortgage Insurance is generally required by mortgage providers whenever the down payment is less than 20% of the purchase price of the house. Although rates vary, the Mortgage Estimator estimates the values as:

5% or less down - .90% per month
10% to 6% down - .78% per month
15% to 11% down - .52% per month

Taxes - Tennessee property taxes are generally composed of two components: county and city. Each component specifies a rate that is applied to the assessed value of the house. The assessed value is a percentage of the appraised value (what the real estate is worth). For residential real estate, the assessed value is 25% of the appraised value. Because property tax is a complicated issue, remember that the monthly tax figure generated by the Mortgage Estimator is a very rough estimate.

SALARY REQUIREMENTS
There are two rules of thumb that serve as guidelines for determining income required to qualify for a mortgage. They are:

1. The monthly payment should not exceed 28% of gross monthly income.
AND
2. The monthly payment plus other monthly debt should not exceed 36% of gross monthly income.

Go to the Mortgage Estimator

For the latest in interest rates, and to apply for a loan, check out:

For information on Homeowner's Insurance, try:

	Allstate
	State Farm
	Nationwide Homeowners Insurance
	Farmers Insurance

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The projections generated by this financial calculator are estimates. The information provided is not guaranteed by SDI Consulting, and should not be relied upon exclusively to make any financial decision.

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