Calculating Your Potential Mortgage Payment in Richmond Virginia

Moving to Richmond Virginia? Buying a house here? Here is how to see what you can afford!

Calculating your mortgage payment as a homebuyer in Richmond involves several factors, including the loan amount, interest rate, loan term, and property taxes.

The first step that you cannot skip is to Determine your Loan Amount and length

The loan amount is the total amount you’re borrowing from the lender to purchase the house. The loan amount does not mean how much the home costs. The loan amount is typically the purchase price of the home minus your down payment. For example, if the potential home costs $350,000 and you’re making a 20% down payment, your loan amount would be $280,000 ($350,000 – $70,000). If you are making a 5% down payment, your loan amount would be $332,500 ($350,000 – $17,500). The average loan length is 30 years but you have other options like a 20 or 15 year. These options will help you pay off your loan faster, but will significantly raise your monthly payment.

After you determine your loan amount, you need to factor in the interest rate:

An interest rate on a mortgage loan is the cost you will pay each year to borrow the money expressed as a percentage rate it does not reflect fees or any other charges you’ll need to pay monthly. This rate can vary based on factors like your credit score, your income, your lender, and market conditions. You can obtain this rate by consulting with lenders or using online tools. Online tools will not be as accurate as consulting with a lender because rates change every day and fluctuate based on your qualifications. An example to figure out your annual interest rate payment is, you have a $350k loan and the interest rate is 6%. $350k x .06= $21k for the first year split up in monthly payments.

Once you have these numbers, you’ll want to consider property taxes and insurance:

Along with your mortgage payment, you’ll need to pay property taxes and homeowner’s insurance. These costs can vary depending on the location, value of your home, and what insurance company you choose. You can estimate property taxes by researching the tax rates in the area where you’re buying. Homeowner’s insurance costs can be obtained by getting quotes from insurance companies. Add both of these monthly costs into your monthly mortgage payment. Buying a house in Richmond, it’s good to know the city taxes are higher then the county taxes!

Consider other monthly fees as well..

like if a house happens to be located in a neighborhood with an HOA. That could be an additional monthly payment of $20 to $400 or $500 a month depending on what the HOA entails. Private mortgage insurance is another potential monthly fee to factor in.  Payments. Mortgage insurance is typically required if your down payment is less than 20% of the property value. It is also typically required on FHA and USDA loans. If you have a conventional loan and your down payment is less than 20%, you will also most likely have this monthly Insurance. The less money you put down, the higher the monthly private mortgage insurance. This insurance is not a permanent monthly payment. It does drop off after you have paid 20% of the home value.

What to do now…

When you buy a house the monthly payment you make is more than just for the price of the home. When buying a house in Richmond, there are a lot of additional items that are both required and not required to pay monthly based on your unique situation. You can use the old fashion pen and paper method like this to determine an estimate on what your monthly payment would be, you could use an online calculator to determine an estimated payment, but if you want an accurate number of what you will be paying monthly, you need to speak to a lender.

If you haven’t spoken with a lender yet, do not use I am random lender without chatting with them first and making sure they are knowledgeable in your market, work more then just 9-5 weekdays, and are trustworthy. Don’t want to take on this task by yourself? I have a group of lenders that I can refer you to. Go with your gut on who you choose to work with!

If you are moving to the Richmond Virginia area and buying a house in Richmond, lets work together! You can find me at BRIANNA WALKER REALTY and BRIANNA WALKER REALTY RICHMOND REALTOR on Instagram!