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Down Payment Calculator (6a)

Small Down Payment Now or Larger One Later (Buy Versus Rent)

Who This Calculator is For: Borrowers trying to decide whether they will
be better off buying a home now with a small or no down payment,
or saving for a down payment first and buying later.

What This Calculator Does: This calculator compares a borrower's wealth
after a specified period when the borrower buys now
and when the borrower saves first.


Information About You and the Home You Wish to Buy
  Expected Years in House, Cannot Exceed Term
  Estimated Property Appreciation Rate Per Year  (e.g. 6.0)
  Rate of Interest on Savings  (e.g. 3.5)
  Number of Months You Rent Before You Buy  (e.g. 12)
  Current Monthly Rent  (e.g. 850)
  Income Tax Bracket ( e.g. 27 )
  Monthly Real Estate Taxes  (e.g. 200)
  Monthly Home Owners Insurance  (e.g. 45)
  Monthly Rental Insurance  (e.g. 20)
Loan Information
  Buy Now Save First
  Purchase Price (e.g. 225000)  Save First - Calculated Automatically
  Down Payment (in Dollars)
  Down Payment as a Percent of Purchase Price ( Calculated Automatically )
  Required Monthly Savings During Rent Period ( Calculated Automatically )
  Loan Amount  ( Both Calculated Automatically )
  Interest Rate on Loan  (e.g. 7.50)
  Loan Term
  Mortgage Insurance (Monthly Premium Plan) ( Both Calculated Automatically )
  Monthly Mortgage Payment  ( Both Calculated Automatically )
  Monthly Mortgage Insurance Payment ( Both Calculated Automatically )
  Points  (Dollar Amount or Percentage of Loan)
  All Other Closing Costs

DO NOT USE DOLLAR SIGNS ($), COMMAS (,) PLUS SIGNS ( + )
OR PERCENTAGE SIGNS (%) IN ANY INPUT BOXES

This is your marginal tax rate, the rate at which each additional dollar of income will be taxed. If you pay only Federal income taxes, it is the highest tax bracket you used when you calculated your taxes. Federal tax brackets currently are: 10%, 15%, 25%, 28%, 33%, and 35%. If you also pay state and/or local income taxes, these marginal rates can be added to the Federal rate. For example, if you had to pay 25% to the IRS and 5% to the state of Pennsylvania, your tax bracket is 30%. To perform a "pre-tax" analysis enter zero (0) as the tax rate. The period cannot exceed the shortest mortgage term. The period may be stated in fractions. For example, 25 years and 1 month would be entered as 25.083, 25 years and two months would be 25.167, and 25 years and 3 months would be 25.25, etc. All settlement costs that might differ between any two deals. This includes all lender fees of any sort, and all third party fees (such as title insurance, apprraisals and credit report), but excluding charges of governments which cannot vary from one deal to another. Do not include escrow reserves for taxes and insurance, or prepaid (per diem) interest. This is the interest rate you could earn on the monies you spend during the period you are in your home. For most people, it would be the interest rate on a bank account or a money market fund. In after-tax cost comparisons, this figure is adjusted to an after-tax basis. The size of the mortgage insurance monthly premium is triggered by the down payment percentage. Mortgage insurance premiums drop significantly as the down payment crosses the 3%, 5%, 10%, 15% and 20% levels. When deciding on your down payment be sure to take this into account. Any number up to 10 will be assumed to be a percent of the loan amount. Any number above 10 will be treated as a dollar amount. Estimate all closing costs other than points and enter your estimate for each loan here. For further information, read "How to Shop Settlement Costs". (Click on link at bottom of page) This is the amount you must save at the stipulated savings rate to provide your desired increase in the down payment. Given the down payment and term you have selected, the numbers shown are typical annual premium rates for "monthly premium plans" that involve no upfront premium. You can override these numbers if you are quoted different rates for monthly premium plans.