How do I calculate my mortgage payment?
You don't have to calculate your own mortgage payment, that's why we've built this mortgage calculator to do the heavy lifting for you. But if you really want to get down to the nitty gritty and see how the sausage is made, this is the basic formula for doing your own basic mortgage payment math:
This formula will only calculate your base mortgage payment, made up of your loan principal and interest. Although the amount of each that you pay every month will change slightly, your P+I payment will remain steady throughout the life of your loan. Over time, the percentage of the payment that's allocated to interest will decrease, and your principal contribution will increase.
Although some mortgage payments will simply be payments of principal and interest, many include additional fees and money that you contribute into an escrow account for monthly. These fees include, but are not limited to:
To calculate your new mortgage with these additional expenses included, just click "show additional inputs" on the mortgage calculator above and add your estimated figures. It will get you a very close estimate of what to expect.
Things to know before buying a house in Kansas
Kansas has a very reasonable real estate market in most of its major cities, but the tax rate in the state is considerably higher than average. On average, Kansans pay 1.29% of their home's assessed fair market value in property taxes each year. That means that if your Kansas home is assessed at $125,500, you'll pay $1,625 in taxes. It's the 14th highest rate in the nation.
Kansas is already feeling the effects of climate change, which will continue to get worse in the future. Right now, warmer temperatures are driving both drought and flooding, due to heavy rainfall that isn't able to sink into the extremely dry summer soil. Tornadoes, as Dorothy Gale learned first hand, are also a significant problem in the state. Kansas currently averages about 100 tornadoes a year, but it's unclear how climate change will affect this number.
You will likely want to upgrade your homeowners insurance policy with additional coverage such as flood and wind insurance, for the specific location where you'll be moving. Ask your insurance agent what's appropriate, even if it's not required. You can also plug that number into the Kansas mortgage calculator to help give you a better estimate of your overall payment.
Tips for first-time home buyers in Kansas
The Kansas Housing Resources Corporation offers first-time home buyers down payment and closing cost assistance in the form of a forgivable second mortgage of up to 20% of the home's sales price. Home buyers must provide 1% of the sales price in their own funds, but provided their income is at or below 80% for their area and their home's price doesn't exceed $143,000 to $257,000, depending on the county, the rest will come from KHRC. Recipients must live in their homes for 10 years for the second loan to be fully forgiven.
Advice for all first-time borrowers
Even if you don't qualify for a mortgage purchase program in Kansas, you can still apply for other loans geared toward first timers, like FHA loans or conventional loans. They have low down payment requirements, so they can be easier to get, and can be used to buy a vast array of homes.
To qualify for any home loan, you'll want to work hard to make yourself more attractive to a mortgage lender. Here are a few tips:
- Boost your credit score by always making on-time payments and keeping your credit utilization under 30%
- Pay down existing debt if possible, to improve your debt-to-income ratio
- Secure a steady job (or don't leave your current one)
- Save money for closing costs and your down payment on a home
Once you're ready to apply for a mortgage (and while it is in process), hold off on opening new credit accounts, because every time you do, a hard inquiry takes a few points off your credit score. These stay on your credit report for two years, so plan accordingly.