- Price of home
- Purchase price of the home you wish to buy.
- Interest rate
- The current interest rate you expect to receive on your mortgage.
- Term in years
- The number of years over which you will repay this loan.
- Property tax rate
- Your property tax rate. 1% for a $100,000 home equals $1,000 per year in property taxes.
- Home insurance rate
- Your homeowner's insurance rate. 0.5% for a $100,000 home equals $500 per year for homeowner's insurance.
- Assoc. & maintenance fees
- Any association fees you are required to pay per month with the ownership of this home. Also include any other maintenance costs you expect to incur with the ownership of this home that you are not paying while you continue to rent.
- Cash on hand
- Cash you have for the down payment and closing costs.
- Loan origination rate
- The percentage the lending institution charges for its origination fee. 1% for a $100,000 home equals $1,000.
- Points paid
- The total number of points paid to reduce the interest rate of your mortgage. Each point costs 1% of your mortgage balance.
- Other closing costs
- Estimate of all other closing costs for this loan. This should include filing fees, appraiser fees and any other miscellaneous fees paid.
- Total for down payment
- Total funds remaining for down payment.
- Monthly rent payment
- Amount you currently pay for rent per month.
- After-tax investment return
- The rate of return, after taxes, you could receive if you invested your closing costs and down payment instead of purchasing a home.
The actual rate of return is largely dependent on the types of investments you select. The Standard & Poor's 500® (S&P 500®) for the 10 years ending Dec. 31st, 2013, had an annual compounded rate of return of 7.3%, including reinvestment of dividends. From January 1970 through the end of 2013, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 10.6% (source: www.standardandpoors.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a financial institution may pay as little as 0.25% or less but carry significantly lower risk of loss of principal balances.
It is important to remember that these scenarios are hypothetical and that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that Separate Account investment funds and/or investment companies may charge.
- Income tax rate
- Your current marginal income tax rate. Use the table below to assist you in estimating your Federal 2014 tax rate.
|10%||$0 - $18,150||$0 - $9,075||$0 - $12,950||$0 - $9,075|
|15%||$18,150 - $73,800||$9,075 - $36,900||$12,950 - $49,400||$9,075 - $36,900|
|25%||$73,800 - $148,850||$36,900 - $89,350||$49,400 - $127,550||$36,900 - $74,425|
|28%||$148,850 - $226,850||$89,350 - $186,350||$127,550 - $206,600||$74,425 - $113,425|
|33%||$226,850 - $405,100||$186,350 - $405,100||$206,600 - $405,100||$113,425 - $202,550|
|35%||$405,100 - $457,600||$405,100 - $406,750||$405,100 - $432,200||$202,550 - $228,800|
|39.6%||over $457,600||over $406,750||over $432,200||over $228,800|
- Expected inflation rate
- This is what you expect for the average long-term inflation rate. A common measure of inflation in the U.S. is the Consumer Price Index (CPI). From 1925 through 2013 the CPI has a long-term average of 3.0% annually. Over the last 40 years highest CPI recorded was 13.5% in 1980. For 2013, the last full year available, the CPI was 1.7% annually as reported by the Minneapolis Federal Reserve. Inflation rate is used to adjust amounts subject to annual increases. These amounts include rent, insurance and tax payments.
- Home appreciates at
- Annual appreciation you expect in the home you are purchasing.
- Future sales commission
- The percent of your home's selling price you expect to pay to a broker or real estate agent when you sell your home.
- House payment
- Total of principal, interest, taxes and insurance (PITI) and maintenance paid per month for your home. Insurance includes Principal Mortgage Insurance (PMI) and homeowner's insurance.
- Initial tax savings
- The value of the tax deduction you receive on your mortgage's interest and home's property taxes. For example, if you have $900 in interest and $100 property taxes per month, the value of the tax deduction would be $250 (at a tax rate of 25%).
- Initial principal payment
- Total of principal paid per month on your mortgage.
- Net house payment
- Your initial house payment minus the value of the tax deduction and principal payment.
- Net home price
- Net selling price of your home after subtracting any sales commissions.
- Monthly payment (PI)
- Monthly principal and interest payment.
- Monthly PMI
- Monthly cost of Private Mortgage Insurance (PMI). For loans secured with less than 20% down, PMI is estimated at 0.5% of your loan balance each year.