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Buyers Resources

Real Estate Mortgage Calculator

Choosing the right mortgage is an essential part of purchasing the right home. Whether you're searching for a home on the waterfront, a land acquisition, or an affordable single-family home, you're likely going to finance your home purchase with a mortgage.

You may think there's only one type of mortgage, but there are actually numerous different options. So... which mortgage type is best? It really depends on a number of factors—like your finances, your buying experience, and your personal preferences. Take some time to learn more about the different types of loans available to Northern Peninsula buyers.

If you have any questions about mortgages, home-buying, or the Northern Peninsula area of Washington, contact us!

Your Quick Mortgage Overview

Simply put, a mortgage is just a (really big) loan. Just like with any other loan, you'll have to speak with a lender to discuss how much money they're willing to lend you, what interest rates they'll charge, and how you'll be repaying the loan.

Mortgage are available for numerous different time periods—15 years, 30 years, or even 40 years or more!—with many conditions, interest rates, and repayment options available. The mortgage that will work best for you depends on things like your income, credit score and credit history, outstanding debts, and assets or savings.

What Kinds of Mortgages Are There?

Fixed-Rate Mortgage

  • Most common, "traditional" mortgage
  • Typically requires 20% down payment (or Private Mortgage Insurance)
  • Constant interest rate throughout the duration of the loan
  • Can be taken out in 10, 15, 20, or 30-year lengths

Adjustable-Rate Mortgage (ARM)

  • Mortgage interest rate will change
  • Usually starts low, then changes to match whatever current interest rates are
  • Are tied to one-year treasury bills or another specific index
  • Usually a cap of two points; lifetime ceiling caps of around six points

FHA Mortgage

  • Often used by lower-income buyers or those with lower credit scores
  • Only 5% down is required (sometimes 3%)
  • Pre-set spending limits set by median prices of the area
  • Steep mortgage insurance premium and other upfront costs are (usually) required

VA Loans

  • Available to veterans and active-duty military members
  • No down payment required, no private mortgage insurance required
  • May require a one-time lending fee
  • May require seller to pay certain closing costs

Two-Step Mortgage

  • Usually called 5/25s or 7/23s; both are 30-year loans
  • Lower interest rate for the first 5 or 7 years, then become convertible or nonconvertible loans
  • Convertible loan: becomes a fixed-rate loan for the remaining time (often higher)
  • Nonconvertible: becomes an adjustable-rate loan (flexes to current rates)
  • Riskier than fixed rates, but less risky than ARMs

Biweekly Mortgage

  • Half as much as a typical loan payment
  • Paid 26 times a year (biweekly), rather than 12 times
  • Cuts down on the amount of interest over the life of the loan
  • Paying so often can be a hassle

So... How Much Will the Bank Loan Me?

This depends on your finances and the type of loan. If you're using an FHA or other government loan, there may be preset pricing limits. Your current savings, income, credit and credit history, and current debt also play a huge role in the amount of money a bank is willing to loan you.

Before you start searching homes for sale, we recommend that you talk to a local lender (or several) to discuss your options and get prequalified for a mortgage. During the prequal process, the lender will review your finances and credit history and let you know how much they're willing to lend. Not only does this help you calculate your monthly payments, it also makes you a much more serious buyer when you do find a home you'd like to buy.

How Do I Find a Lender?

If you need a lender in the Sequim or Port Angeles area, contact us for our recommendations. In the meantime, feel free to play around with the mortgage calculator at the bottom of this page. Try out some different numbers (a quick Google search can pop up some common interest rates) and see how much you'll be paying (per month) at different price points. 

Any Other Questions?

We have answers. If you're thinking of buying a home in Port Angeles, it just might be time to pick up the phone and give Jace Real Estate a call. We'd love to talk about your goals and help you get in touch with the local experts you'll need to help you get there.

Start Your Calculation

Questions? We're Here to Help!

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