Maryland Mortgage Calculator | Ascension

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Maryland Real Estate Market

The Maryland real estate market was incredibly strong at the end of last year. According to the Maryland Association of Realtors, the number of units sold in November 2020 was 25.6% higher than the previous year. There was also an 11.4% increase in the average price of homes sold in Maryland and a 12.2% increase in the median price from 2019.

Limited inventory was an important factor. There were 9,153 active properties on the market in 2020, a huge decrease from 22,445 in 2019. Homes also took a median of eight days to sell in 2020, down from 24 days a year earlier.

When demand increases but supply decreases, prices go up. Unfortunately, these high prices can make it more difficult to find your ideal home. But here’s the good news: Record-breaking mortgage rates in Maryland have also contributed to strong demand. If you can find a reasonably priced home, you will be able to borrow at one of the lowest rates in history.

How do I calculate my mortgage payment?

Your mortgage payment has four distinct components: principal, interest, taxes and insurance. These four things go by the acronym PITI. If the home you chose is located in a neighborhood with a homeowners association, you will also need to pay HOA dues.

In Maryland, the average home value was $ 317,033 in 2020. That’s above the national median of $ 295,300, but it’s still far from one of the most expensive in the country. Let’s say you put 20% on a mid-priced house and got a 2.80% interest rate on a 30-year mortgage. You can expect to pay around $ 1,041 in principal and interest per month, not including property taxes, insurance, or HOA fees.

Our Maryland mortgage calculator can help you get an idea of ​​your total monthly mortgage costs. You can not only calculate how much you will pay for your loan, but also what you will need to pay for taxes and insurance. It can help to better understand each of these components of your mortgage payment.

Main

The main one is the balance owed. Part of your monthly payment is used to reduce it each month. The amount of principal you owe monthly is calculated to ensure that you will pay off your entire balance at the end of your loan term (which for most mortgages is 15 years, 20 years, or 30 years. ).

Interest

Interest is the cost of the loan. You have to pay the bank money every month in interest on the funds they loaned you to buy your house. The higher your interest rate, the higher your monthly payment will be and the more total interest you will pay over time. If you have a fixed rate loan, your interest rate will never change, but if you go with an adjustable rate mortgage, your rate and payment could go up or down.

You may find that mortgage rates go down after you get a home loan. If this is the case, you may be able to shop around with the best refinance lenders for a new loan at a lower rate.

Taxes

Land or property taxes are assessed by local governments to fund schools and other services. Mortgage lenders want to make sure you pay taxes so that your home doesn’t get foreclosed on. This is important for lenders because your home is the security for the loan.

As a result, your lender will divide your annual tax payment by 12 to determine what you owe each month. He will then add this to your mortgage payment and place the collected funds in an escrow account. Your annual property tax bill is sent directly to your lender, who pays it from the escrow account.

In Maryland, the median property tax paid each year is $ 2,774 according to Tax-Rates.org. If you pay the median, you’ll have to pay around $ 230 more per month for taxes.

Assurance

Home insurance varies by region, property, provider and other factors. If you are making a small down payment, you may also need to pay for private mortgage insurance (PMI). Home insurance covers your home and its contents, while PMI protects the mortgage lender against loss in the event of foreclosure.

In Maryland, the average home insurance premium is $ 1,518 per year. If you pay the average, your lender will divide that amount by 12 and add about $ 127 to your monthly mortgage payment. As with taxes, it will keep the collected funds in escrow until it is time to pay your insurance bill.

Things to Know Before Buying a Home in Maryland

If you want to use a Maryland mortgage calculator, chances are you are seriously considering buying a home. But calculating your monthly mortgage payment is only one step. Before you decide to buy, there are a few more steps you should check off your to-do list.

Save an emergency fund

Homeownership can be expensive, especially because you can incur unexpected repair costs. You need an emergency fund to be prepared for any unexpected problem that arises. Having a fund with three to six months of living expenses saved also lowers your chances of foreclosure. It ensures that you can pay your mortgage lender even if you lose your job or get sick.

Become a qualified borrower

There are a number of things that mortgage lenders consider when deciding whether you are a high risk or a low risk borrower. These include your credit score, the stability of your income, and the amount of your income relative to your debt. If you have a good credit rating, have been working for a while, and have low debt relative to your income, you should be able to get a competitive home loan.

Improving your credentials so that you qualify for a loan at even a slightly reduced APR can make a big difference in the amount you pay overall. Use our free Maryland mortgage calculator to better understand how much you could save.

Shop for a home loan

Choosing the right mortgage is important. As our guide to home loans explains, you have many different options. Loan rates and terms can also vary widely from mortgage lender to mortgage lender.

Get quotes from at least three lenders and use our simple Maryland mortgage calculator to see what your payment would be with each. This way you can decide which one is best for you.

Tips for first-time home buyers in Maryland

Becoming a first-time homeowner is a major life change, and it’s one you want to make sure you’re ready for. Beyond just using a simple Maryland mortgage calculator to estimate payments, here are other things to consider.

Prepare for all the costs of homeownership

You can calculate the costs of principal, interest, taxes, and insurance using a Maryland mortgage calculator – but it’s not the only expense you need to be prepared for once you own your own home. . For example, you’ll want to set aside about 1-2% of your home’s value per year for maintenance. You also need to think about upfront costs, such as expenses associated with moving, and ongoing expenses such as snow removal.

Consider closing costs

In 2020, average closing costs totaled $ 5,749 in the United States. Many first-time home buyers are caught off guard by the high amount of these closing costs. Make sure you are prepared to pay them off before you buy your Maryland home. You may be able to borrow to cover some of these costs, but be aware that this means you will be paying interest for decades.

See if first-time home buying programs could help

Maryland offers several programs for first-time home buyers, including the Maryland Mortgage Program.

The government has also taken steps to help people buy their first homes. For example, the Federal Housing Administration (FHA) guarantees loans to reduce risk for lenders so that they can relax their eligibility standards. FHA loans are not limited to first-time buyers, but many potential new homeowners take advantage of them because of the easier approval.

It’s worth exploring all of the different homeownership programs available to you. You may just be able to get the help you need to buy sooner at a more affordable total price.


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