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Step 7: Estimate the Payment and Cash to Close on the Home

Run real numbers on the exact home: the payment, cash to close and rate for every program you qualify for.

Once you have a home in mind, estimate the real numbers before you write an offer. Unbeatable uses the home's price, taxes, insurance and HOA dues, and today's pricing for each program.

What the estimate shows

  • Monthly payment (PITI): principal, interest, taxes, insurance, mortgage insurance and HOA dues
  • Interest rate and APR: the APR includes certain fees, so it's the better way to compare offers
  • Cash to close: down payment plus closing costs and prepaid items, minus credits
  • Loan-to-value ratio: the loan divided by the price or value, which drives pricing and mortgage insurance

Levers you can pull

  • Down payment. More down lowers the payment and can remove mortgage insurance.
  • Discount points. Pay upfront to lower the rate. One point is 1% of the loan amount.
  • Lender credits. Take a slightly higher rate in exchange for help with closing costs.
  • Price and seller credits. A seller credit lowers cash to close; a price cut lowers the payment.
  • Program and term. Compare 30-year with 15-year, and fixed with adjustable.

Decide your walk-away number

Before you offer, write down the highest price where the payment and cash to close still work. In the negotiation, this keeps you from being talked past your budget.

Rates change daily. Your rate isn't set until you lock it after you're under contract.

Next: make an offer.

Your next move, by loan program

  • Conventional: Try 5%, 10% and 20% down. Mortgage insurance and rate pricing both change at those break points. Run my numbers
  • FHA: FHA adds a 1.75% upfront premium to the loan amount and a monthly premium. Compare it with conventional for your score. Run FHA numbers
  • VA: Include the VA funding fee (2.15% for first use with less than 5% down) unless you're exempt for a service-connected disability. Run VA numbers
  • USDA: The 1% guarantee fee is added to the loan, plus a 0.35% annual fee paid monthly. Run USDA numbers
  • Jumbo: If you're near the conforming limit, compare a jumbo with a larger down payment that keeps you conforming. Run jumbo numbers
  • Investor: Enter expected rent to see the DSCR. Lenders also count vacancy, taxes, insurance and HOA dues. Model a rental