It is essential you know your numbers when going in to make a house purchase. We provide these tools so you can make the best choice with the property you pursue.
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Mortgage Terms (Home Buying in San Ramon)
Down Payment
The typical rule of thumb is to pay 20% of the home's price as your down payment, although some mortgage loans require as little as 3.5 percent down.
Your down payment reduces the total amount of your mortgage loan.
The more money you put down, the lower your payments will be - or the more expensive a house you can buy.
Loan Term
Your loan program can affect your interest rate and monthly payments. Your lender will be able to provide you exact details on what you qualify, but this calculator is good at providing you an overview of your payments based upon your estimated loan terms.
Choose from 30-year fixed, 15-year fixed, and more in the calculator.
Loan Type
There are several types of mortgage loans, but the most commonly used are fixed-rate and adjustable-rate loans.
Fixed-rate loans have the same interest rate for the entire duration of the loan.
That means your monthly payment will be the same, even for long-term loans, such as 30-year fixed-rate mortgages.
Two benefits to this loan type are stability, and being able to calculate your total interest up front.
Adjustable-rate mortgages (ARMs) have interest rates that can change over time.
Typically they start out at a lower interest rate than a fixed-rate loan, and hold that rate for a set number of years, before changing interest rates from year to year.
For example, if you have a 5/1 ARM, you will have the same interest rate for the first 5 years, and then your interest rate will change from year to year.
The main benefit of an adjustable-rate loan is starting off with a lower interest rate.
Interest Rate
This field is pre-filled with the current average mortgage rate.
Your actual rate will vary based on factors like credit score and down payment.
Property Tax Rate
The mortgage payment calculator includes estimated property taxes based on the home's value. Property taxes are typically required by lenders, depending upon your loan program. If the loan program requires the lender to collect your property taxes, then you will need to have an escrow/impound account. The amount of property taxes collected will vary greatly upon the month that you close on your new home.
Please review the escrow/impound table below which will help you determine how many months they will collect for property taxes and when your first payment will be due.
You can edit this in the advanced options.
Home Insurance
Home insurance or homeowners insurance is typically required by lenders, depending on the loan program. If your lender says that you need to have an escrow/impound account, then you will be paying your lender monthly for your home insurance.
When you purchase a home, your lender has the 1st year paid for your home insurance upfront (paid in full at closing) through your closing costs. They then look at the amount you paid and estimate a small increase in the total and then divide that by 12. They do collect 2 months up front with your closing costs because they need to have all the fees collected to pay your insurance on your behalf when it becomes due. If you have any questions about how this is collected, please consult your lender to discuss.
You can edit this number in the mortgage calculator advanced options.
HOA Fees
A homeowners association fee (HOA fee) is a fee that you will pay in addition to your monthly mortgage. This fee must be paid by you if your purchase a home that is in an HOA. Our buyer agents will let you know if the home you are considering purchasing has an HOA fee. These HOA fees can be paid monthly, quarterly, bi-anually, or yearly. Each HOA is set-up differently and our buyer agents will let you know the details on the HOA for the properties you are considering purchasing. Buying a home with an HOA fee will affect your income-to-debt-ratio, so be sure to talk to your lender to determine if your purchasing power (maximum loan amount) would decrease if you purchased a home with an HOA fee.
HOA's collect these fees to assist with maintaining and improving the properties in the association. Some of these fees are collected to maintain common areas (like neighborhood entrances with lights, sign, and landscaping), or provide community pools, gyms, tennis courts, BBQ area, playgrounds, etc. Some of these fees are collected to help maintain the buildings - like in a condo project. Each HOA is run separately and you will need to read through their paperwork to determine if buying a home with an HOA is right for you.
WHAT IS AN ESCROW/IMPOUND ACCOUNT?
An escrow/impound account is a neutral depository held by your lender for funds that will be used to pay expenses incurred by the property, such as taxes, assessments, property insurance, or mortgage insurance premiums which fall due in the future. You will pay one-twelfth of the annual amount of these bills each month with your regular mortgage payment. When the bills fall due the lender pays them from the special account. At closing, it may be necessary to pay enough into the account to cover these amounts for several months so that funds will be available to pay the bills as they fall due.
The following chart shows the closing month, when your first loan payment will be due, the number of months that will be collected at closing for your tax reserves and insurance reserves for your impound account for homes purchased in California.
| Month Recorded/Closed | First Loan Payment Due | Est. Property Tax Reserves | Insurance Reserves | Status of Property Taxes |
|---|---|---|---|---|
| January | March 1st | 5 Months | 2 Months | 1st Installment Paid |
| February | April 1st | 1 Month | 2 Months | Both Installments Paid |
| March | May 1st | 1 Month | 2 Months | Both Installments Paid |
| April | June 1st | 2 Months | 2 Months | Both Installments Paid |
| May | July 1st | 3 Months | 2 Months | Both Installments Paid |
| June | August 1st | 4 Months | 2 Months | Both Installments Paid |
| July | September 1st | 5 Months | 2 Months | Paid thru June 30th |
| August | October 1st | 6 Months | 2 Months | Paid thru June 30th |
| September | November 1st | 7 Months | 2 Months | Paid thru June 30th |
| October | December 1st | 6 Months* | 2 Months | Paid thru June 30th |
| November | January 1st | 3 Months | 2 Months | 1st Installment Paid |
| December | February 1st | 4 Months | 2 Months | 1st Installment Paid |
* or 2 months reserve if 1st Installment has already been paid
We recommend that you check with your lender to confirm that this information is accurate for the loan program that you have been pre-approved for your home purchase. Based upon the table above if you closed on your home in October, your 1st mortgage payment would be due on December 1st. The lender will either collect 6 months of property tax reserves or they will collect 2 months, depending upon if the Sellers have already made the payment for the 1st installment. The lender will also collect 2 months of home insurance so that they will have a full 12 months of payments when they receive your annual insurance bill renewal in September.
| 1st Installment | 2nd Installment |
|---|---|
| Due November 1st | Due February 1st |
| Delinquent December 10th | Delinquent April 10th |
| For the Months of July to December | For the Months of January to June |
If you have an escrow/impound account, then your lender will mail out your property taxes and they will also receive a copy of your tax bill/statement. If you have any questions about their payment of your property taxes, you will need to contact your lender or loan processor.
If you have questions for the county assessors office regarding your property tax bill, you can visit the county assessors website from the links below:
Alameda County Assessor's Office at www.acassessor.org
Contra Costa County Assessor's Office at www.contracosta.ca.gov
San Francisco County Assessor's Office at www.sfassessor.org
Marin County Assessor's Office at www.marincounty.org
Santa Clara County Assessor's Office at www.sccassessor.org
San Mateo County Assessor's Office at www.smcacre.org
San Joaquin County Assessor's Office at www.sjgov.org
Santa Cruz County Assessor's Office at www.co.santa-cruz.ca.us
Your lender is always the best resource for anything related to your loan and/or impound/escrow account. They are the ones that set them up for you, but we always make sure that our buyer agents understand the loan process and can help answer your questions, or direct you to the source to answer your questions. This information is a good guideline on when your first payment will be due or how many months of property taxes will be collected at closing.