Explore Your Numbers
Choosing the right mortgage is about finding the perfect match between your numbers and the available mortgage options (and there are frequently more options than you’d think!) Here are the numbers to consider along with your quoted interest rate.
Most individuals go with a 30-year fixed with the
lowest interest rate because that’s the “standard” option.
But it’s certainly not your only option!
There are pros and cons to every loan. Sometimes your best option is hiding in one of your three key numbers:
Amount due at Closing
Follow along as we take three buyers through different scenarios using these numbers to better understand what financial option is best for them.
Meet Our First Buyer: Joe
Joe has an excellent credit score, a solid income and a growing family.
Joe’s considering a 15-year loan to pay off his home faster.
He also knows he’s likely to be in this house only 3-5 years.
Joe's high credit score also qualifies him for a no-cost mortgage option – something he wasn’t aware of, or how it could impact his cash flow today.
Joe’s Numbers
Home Price
$600,000
20.0%
780
30-Year Fixed
with NO closing costs
7.250%
$3,274.45
$0.00
30-Year Fixed
with closing costs
7.000%
$3,193.45
$4,000.00
15-Year Fixed
with closing costs
6.500%
$4,181.32
$4,000.00
Joe chooses the 30-year
no closing costs option.
This gives him an affordable monthly payment and keeps extra cash in his pocket, especially if he moves or refinances within 4 years.
Meet Our Next Buyer: Christina
Christina has a 700 credit score, a $2,900 monthly mortgage budget and wants to put 5% down.
She is house hunting in a hot real estate market that she believes has a lot of potential for property value growth.
However, her initial calculations omitted monthly mortgage insurance which is generally triggered by down payments under 20%.
Christina’s Numbers
Home Price
$450,000
700
???
MORTGAGE PAYMENT
20% Down Payment
with 30-Year Fixed
10% Down Payment
with 30-Year Fixed
$405,000.00
7.000%
$2,395.09
$0.00
$2,395.09
$90,000.00
$3,715.00
$360,000.00
7.000%
$2,844.17
$131.63
$2,826.11
$45,000.00
$3,664.38
5% Down Payment
with 30-Year Fixed
$427,000.00
7.000%
$2,694.48
$195.94
$3,040.11
$22,500.00
$3,681.25
Christina chooses the 10% down option.
It provides some up-front savings and keeps the mortgage payment under her budget. If her house appreciates as she predicts, she may be able to end or significantly lower her mortgage insurance monthly costs.
Meet Our Final Buyer: Ted
Ted has a low credit score and not a lot of cash on hand.
His pre-approval and property choice make him eligible for a USDA loan, an FHA loan and a conventional loan (though with significant mortgage insurance costs.)
Ted’s Numbers
Home Price
$325,000
640
3.0%
LOAN AMOUNT
MORTGAGE PAYMENT
3% Down Payment
with 30-Year Fixed
FHA 3.5%
with 30-Year Fixed
7.000%
$2,097.37
$438.72
$2,536.09
$9,750.00
$3,436.06
$315,250.00
$315,000.00
6.500%
$2,054.22
$146.26
$2,128.58
$11,375.00
$3,437.28
$313,625.00
$5,488.00
$319,113.00
USDA 0%
with 30-Year Fixed
$325,000.00
$3,250.00
$328,250.00
6.500%
$1,982.32
$82.06
$2,136.28
$0.00
$3,428.75
Ted chooses the USDA option.
While FHA and USDA loans require funding fees that are typically rolled onto the backend of the loan amount, they meet Ted's need for a low down payment. FHA and USDA loans have mortgage insurance that does not fall off, but Ted can look to refinance:
when interest rates go down,
when he builds up his credit score, or
with enough appreciation mortgage insurance won't be required for a conventional loan.
Let’s Gather Your Numbers
Our experts are here to help you navigate your mortgage options. And we can do it without your sensitive data, credit checks or completing a mortgage application before you’re ready. Let us know how we can best support you by clicking below.
Submit your name, email and questions / concerns and one of our mortgage lender experts will be in touch with you soon.