5 Important Expenses Mortgage Calculators Leave Out

Justin Kelly
October 7, 2022

There are many online mortgage calculators available to help you determine what an estimated monthly payment would be on a home purchase loan. Although you can easily plug and play with most of these calculators it is important to understand that many variables exist.

When you attempt to do this on your own, important information relating to the total cost of a monthly mortgage payment can often be missing or incorrect. Here are five important fees that mortgage calculators often don't include in the monthly payment and even if they do, many times are inaccurate. 

1. HOA Dues

Homeowners association dues are generally required on master planned communities where a developer has built a large track of homes and planned for certain amenities to be available for residents.  These fees are usually paid outside of the monthly mortgage payment and are due to the association on a monthly, quarterly, or annual basis. 

2. CDD Fees

Community development district fees are a vessel used by developers to cover the costs of building amenities or improvements in a neighborhood. They borrow money from the county and place the responsibility of payment for the loan on the buyer that purchases the home.

These fees are usually paid over a 20–30-year period and the yearly cost is added to the real estate tax bill. Don’t confuse these with homeowners’ association dues as they are different, and some communities have both HOA and CDD fees required to be paid by the homeowner.  

3. Real Estate Taxes and Property Insurance

These are real costs that must be considered on any monthly budget. They are typically paid annually or as part of the monthly payment as part of an escrow account.

The cost of real estate taxes varies based on the county the property is in and the tax-assessed value of the home. The cost of homeowners insurance depends on the location and types of insurance required for the property: homeowners, wind, and or flood.

4. Mortgage Insurance

Mortgage insurance often gets confused with homeowners’ insurance, but they are not the same. Homeowner's insurance covers the property, and mortgage insurance covers the lender in case the borrower defaults on a loan that's more than 80% of the value of the home. This rate or cost is determined by the borrower's final loan-to-value ratio and credit score. 

5. Market Interest Rates

Obviously, the interest rate you pay on the loan is very important to get an accurate monthly payment. Rates are constantly changing based on market conditions and require a licensed mortgage professional to give an accurate quote based on the loan amount, loan-to-value ratio, credit score, and loan program.

As you can see, there are many things that make up an accurate monthly payment. All require careful review of the property and the borrower's financial information that an online mortgage calculator can't do.

If you intend on using one of these online mortgage calculators, do it to get a loose idea of the payment range. You should only rely on the principal and interest payment; all other potential monthly expenses are very difficult to get accurate without the help of a licensed mortgage broker or correspondent mortgage lender. 

Trust the Experts

CPF Mortgage is a family-owned and operated independent mortgage company and broker that provides expert home-financing support and devoted customer service.

We have a tried-and-true process that's backed up by over 350+ five-star reviews on Google. Not to mention, our ability to close a deal in almost two weeks can give you the peace of mind that you are working with the best mortgage professionals.

To learn more about which loan option works best for you, please feel free to reach out to us or call 727-263-3146.

For more tips and insights into the mortgage process check out our other blogs and videos!

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Christopher Paul Financial, LLC dba CPF Mortgage is a Florida mortgage lender NMLS 222883, Florida state license MLD929, Colorado registered mortgage company NMLS 222883, licensed Tennessee mortgage lender NMLS 222883, and Georgia Residential Mortgage Licensee NMLS 222883. The main office is located at 10710 State Road 54, Ste. C101, Trinity, FL 34655. All loan approvals are credit driven, and all decisions are based on underwriting credit approvals. All rates, terms, and programs are subject to change without notice. Borrowers should consider their options carefully when choosing a loan program.
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