How do I calculate my mortgage payment?
For most people, the process of calculating a mortgage payment involves a mortgage calculator like this one. But, if you're more mathematically curious than most people, the formula to do so by hand is below:
'%3E%3CanimateTransform attributeName='transform' type='rotate' repeatCount='indefinite' dur='2s' values='0 364 104;360 364 104' keyTimes='0;1'/%3E%3C/circle%3E%3C/svg%3E)
When you calculate your mortgage payment like this, keep in mind that what comes out is simply the principal and interest portion of the payment. Although a few mortgages still bill homeowners this way, most will include additional house-related expenses, which may include:
Many of these expenses, like a monthly portion of your taxes, will be deposited into your escrow account, to be paid by the bank when the expense is due. You'll get a regular statement for this account, which will show how much it's holding and when bills are paid.
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 Nevada
Nevada's housing market is unusual, making market conditions very competitive at times. Due to a limited amount of land that's truly habitable, people are forced to live very close together in concentrated urban areas, or risk having extremely limited infrastructure available to them. Fortunately, Nevada's property taxes are reasonable despite this, at just 0.84% of a property's assessed fair market value. This means that if your property is assessed at $207,600, you'll only pay $1,749 a year in taxes. The state is 28th in the nation, so taxes are just a little bit below average.
Parts of Nevada are seeing significant increases in temperature due to climate change, and this is leading to other, more significant problems. The much-needed snowpack is diminishing, and rainfall is decreasing, at the same time that temperatures are causing more evaporation, leading to more severe droughts. Wildfires are also a risk to both homeowners and the overall environment in the state.
If you live in Nevada, a homeowners insurance policy is a given, but many areas not previously at risk of wildfire may have increased potential in the coming years, so coverage for that hazard could be warranted. Ask your insurance agent what's appropriate, even if it's not required. You can also plug the cost of your insurance into the Nevada mortgage calculator to help give you a better estimate of your overall payment.
Tips for first-time home buyers in Nevada
The Nevada Housing Division has a program available to help with down payment and closing cost assistance for first-time home buyers. It's called Home is Possible for First-Time Homebuyers.
The program provides assistance of up to 4% of your total loan amount as a low to no interest, 30 year, non-forgivable second mortgage. There are income and purchase price limits, based on where you intend to buy in your state, and you must intend to live in the home as your primary residence. All recipients must also complete a home buyer education course.
Advice for all first-time borrowers
Even if you don't qualify for the Home is Possible program in Nevada, you want to put your best foot forward as a potential borrower because you have other options to help reduce your down payment requirements, like FHA, VA, and USDA products.
Credit scores are important, but they're not the only thing that matters to a mortgage underwriter. Before you submit your loan application, make sure that:
- Your employment situation is stable and you've been in your job for at least two years.
- Your closing funds are safe in a bank account and that they can be verified.
- You make your debt payments on time, every month.
- You carry as little debt as possible, to improve your debt-to-income ratio.
Your underwriter will check all of these things at least once again after your loan approval and before closing, so don't do anything unexpected, like opening new accounts or suddenly charging up your credit card. Definitely do not touch your closing funds. Any of these things can cause your loan to be denied at the 11th hour.
