Buyers Resources

Real Estate Mortgage Calculator

Whether you're a first-time homebuyer or a seasoned real estate investor, if you're planning on buying a home you've probably already started thinking about its financing. The most common way to pay for a home is with a mortgage. Generally, a mortgage is a loan for the amount of money your home is worth. There are tons of different options for mortgages. Which mortgage is right for you depends on your financial history, current income, credit score, and more.

Let's dive in to the many different mortgage options available to Dallas area homebuyers. If you have any questions about buying a home in the greater Dallas area, please don't hesitate to give us a call at 214-680-4550.

What's in a Mortgage, Anyway?

Like we said earlier, a mortgage is a loan for the amount of money your home is worth. How much you end up paying every month depends on what kind of mortgage you get. It depends on whether the mortgage is conventional fixed-rate, adjustable-rate, or a VA loan. One good way to begin choosing your mortgage is asking yourself whether or not you're comfortable choosing a loan with an adjustable rate.

Basically, with an adjustable rate your payments may vary over time. If you opt for the more traditional fixed-rate mortgage, you can expect your payments to be the same every single month.

Common Mortgage Options

Fixed-Rate Mortgage

  • What most people think of when they think 'mortgage'
  • Constant interest rate means a reliable monthly payment
  • Available in 10, 15, 20, or 30-year lengths

Adjustable-Rate Mortgage

  • Interest rate fluctuates over time, beginning low and then increasing steadily
  • Usually a cap of two points; lifetime ceiling caps of around six points
  • Rate can drop over time

FHA Mortgage

  • Value can't be greater than a pre-set limit
  • Amounts are set by the median prices of different cities within a particular area
  • Only 5% down is required (sometimes 3%)
  • Steep mortgage insurance premium and other upfront costs are required

VA Loans

  • Available for military veterans, active-duty members
  • No down payment
  • Not allowed to pay points; responsible for some fees
  • Seller usually has to pay the extra money

Two-Step Mortgage

  • Commonly called 5/25s and 7/23's
  • Convertible converts the loan to a fixed loan for the remaining 25 or 23 years
  • Nonconvertible - converts the loan to an ARM
  • Both are 30-year loans
  • Fixed interest rates for the first 5 or 7 years; then change to convertible or nonconvertible loans
  • Both can be amortized over 30 years

Bi-Weekly Mortgage

  • You pay half the amount of a monthly payment
  • Paid 26 times a year (not once a month)
  • Cuts down on the amount of interest over the life of the loan

How Much Can I Afford?

A fantastic way to determine how much you can afford to spend on a home is by getting pre-approved for a mortgage. During the pre-approval process, you'll sit down with a local lender to review your finances. The lender will review your annual income, credit score, savings, and any debts or liabilities you may currently have. Then, after reviewing your information, the bank will let you know exactly how much they are willing to lend you.

Boom, your budget is set. We highly recommend going through the pre-approval process because:

It lets you know exactly how much financing the bank is willing to loan you

You'll know what your potential maximum mortgage payment will be

You'll know how much your down payment will be

It makes you a more competitive buyer to sellers

If you need a lender in the Dallas Area, please give me a call at 214-680-4550 and I'd be happy to recommend one. In the meantime, feel free to play around with this mortgage calculator, to get a feel for how much you might be spending per month on a mortgage.

Any Other Questions?

We have answers. If you're thinking of buying a home in Dallas Area, TX, we should chat. I would love to connect you with home-buying resources or sit down to discuss your future plans.

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