Down Payment Calculator

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What is the downpayment?

The down payment is a type of the payment made in cash while purchasing the property. It is the initial upfront portion of the total amount. The downpayment is important to the lenders and offers a certain degree of assurance. The larger down payments lower risk for the borrowers. The downpayment decreases the amount of interest paid over the time period of the loan and lowers the monthly payments.

Benefits of a down payment:

Interest savings: The larger down payments is like an investment that yields a return that includes a part of the rate of interest on the money the borrower is not borrowing.

Points: Loan fees or pay points expressed as a percentage of the loan amount.

Mortgage insurance: The mortgage insurance can be eliminated or reduced when large down payments are made.

Dropping the loan below the conforming loan limit: The large downpayment reduces the rate of interest and lowers the loan amount and confirms loan limit.

Different loans and different downpayment requirements:

Conventional loan: The downpayment required is 20% and in some cases, it is lower 20% based on lenders. If the downpayment is less than 20% the borrower is asked to purchase private mortgage insurance.

FHA loan: The downpayment required by 3.5%. The US federal housing administration (FHA) provides insurance for the primary residence homebuyers.

VA loan: This loan doesn’t need any downpayment. As this loan is assured by the Department of Veterans Affairs.

Closing cost: The general estimation of closing cost is around 3% of the purchase.

The components required for the downpayment calculator:

For calculating if upfront cash available:

  • The upfront cash available.
  • Down payment.
  • Interest rate.
  • Loan term.

For calculating the home price:

  • Home price.
  • Downpayment.
  • Interest rate
  • Loan term.

For calculating home and upfront cash available:

  • Home price.
  • Upfront cash available.
  • Interest rate.
  • Loan term.

With is calculator you can calculate the loan estimation in three variations like home price, upfront cash availability and both.