money How Much a $350,000 Mortgage Will Cost You
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This article first appeared on the Credible blog.
A $350,000 mortgage will more than cover the median price of an existing home, which currently costs $310,800, according to data from the National Association of Realtors.
If you’re considering a loan of this size, use this guide to understand both the monthly payment and long-term costs you can expect as a borrower.
Credible can help you compare mortgage rates from multiple lenders in just a few minutes and put you on the path to pre-approval.
Monthly payments for a $350,000 mortgage
Monthly mortgage payments always contain two things: principal and interest. In some cases, they might include other costs as well.
Here’s what typically makes up a mortgage payment:
Principal: This money is applied straight to your loan balance.
Interest: The cost of borrowing the money. How much you’ll pay is indicated by your interest rate.
Escrow costs: If you opt to use an escrow account (or your lender requires it), you’ll also have your property taxes, mortgage insurance, and homeowners insurance rolled into your monthly mortgage payment, too.
On a $350,000, 30-year mortgage with a 3% APR, you can expect a monthly payment of $1,264.81, not including taxes and interest (these vary by location and property, so they can’t be calculated without more detail).
The payment would jump to $2,417.04 for a 15-year loan. Use the below calculator and table to see what your home will cost you every month.
Here’s a quick look at what the monthly principal and interest payment would be for a $350,000 mortgage with varying interest rates:
Where to get a $350,000 mortgage
You can get a $350,000 conventional mortgage from most banks and mortgage lenders. Rates and terms vary by lender, so you should get quotes from multiple lenders to be sure you’re getting the best deal.
To do this, you can contact each lender individually, fill out their application, and wait for a quote, or you can use Credible, which allows you to compare personalized prequalified rates from our partner lenders in the table below.
Credible’s process is simple and safe, and it only takes a few minutes to see rates from multiple mortgage lenders.
What to consider before applying for a $350,000 mortgage
Before taking out a $350,000 mortgage loan, you should consider the big picture. Not only do mortgages come with a monthly payment, but there are also both upfront costs and origination fees to take into account.
Understanding these is critical before you apply for a mortgage of this size.
Total interest paid on a $350,000 mortgage
You’ll pay more in interest the longer your loan term is.
For example: On a 30-year, $350,000 loan with a 3% APR, your total, long-term interest costs would be $181,221. If you took out a 15-year loan at those same terms, your interest would total just $85,066.
Your rate can also heavily play into your long-term interest costs as well, which is why it’s important to use Credible and shop around for your loan and lender.
Amortization schedule on a $350,000 mortgage
An amortization schedule breaks down your payments, interest costs, and principal balance for every year of the loan.
Here’s an example of what one might look like for a $350,000, 30-year mortgage loan with a 3% APR:
Here’s what an amortization schedule might look like for a 15-year, $350,000 mortgage with a 3% APR:
How to get a $350,000 mortgage
Applying for a mortgage can be quite simple. When filling your mortgage application out, you’ll want to have some financial details on hand, including your income, estimated credit score, homebuying budget, and info regarding your assets and savings.
Once you’re ready to apply for your $350,000 mortgage, you’ll follow these nine simple steps:
Estimate your homebuying budget: Before starting your home search, take a look at your income, monthly debts, and household expenses, and run the numbers. You’ll need to determine what you can afford both for a down payment and your monthly mortgage.
Review your credit report: Pull your credit report and look for any overdue accounts, late payments, or accounts in collections. These could all hurt your mortgage application. You’ll also want to look at your credit score. The higher your score, the better the interest rate you’ll qualify for.
Get pre-approved: Use Credible to get an instant streamlined pre-approval letter online. A pre-approval will give you a good idea of what you’ll be eligible to borrow and what price range you should be shopping in.
Shop around for mortgage rates: Compare the loan estimates you were given by each lender that pre-approved you. Look at the interest rate on each loan, as well as the closing costs, fees, and total cash to close, too.
Negotiate the purchase details: Use your pre-approval letters to make any offers you submit more attractive. Once a seller accepts, you’re one step closer to owning a home.
Complete the full application: Fill out the full application for the mortgage lender you’ve chosen. You’ll likely need a number of documents for this, including W-2s, pay stubs, tax returns, bank account statements, and more. Your loan officer will direct you on what paperwork to submit.
Get approved by an underwriter: Your lender’s underwriter will verify all your information and ensure you have the capabilities to repay the loan. Once approved, you’ll be scheduled a closing appointment.
Prepare for closing: While you await your closing date, you’ll need to secure a homeowners insurance policy. You should also review your final closing disclosure form to understand how much cash to bring to closing.
Close on your mortgage: Attend your closing appointment, pay your closing costs and down payment, and sign the final paperwork. Once the funds have been transferred, you’ll be a bona fide homeowner.
If you have questions along the way, your real estate agent and loan officer should be able to help.
About the author: Aly J. Yale is a mortgage and real estate authority. Her work has appeared in Forbes, Fox Business, The Motley Fool, Bankrate, The Balance, and more.
The post How Much a $350,000 Mortgage Will Cost You appeared first on Credible.
