What is PMI and when do I have to pay it?

PMI stands for Private Mortgage Insurance. It's insurance your lender requires when your down payment is less than 20% of the home price — typically 0.3% to 1.5% of the loan amount per year. It automatically drops off once you reach 20% equity in the home (usually when your loan balance falls to 80% of the original home value).

What is DTI and what ratio do lenders want?

DTI (Debt-to-Income) is the percentage of your gross monthly income that goes to debt payments. Front-end DTI counts only housing costs (ideal under 28%); back-end DTI includes all debts like cars, student loans, and credit cards (ideal under 36%). Most conventional loans require back-end DTI under 43%; FHA loans may allow up to 50% with strong compensating factors.

Is a 15-year or 30-year mortgage better?

A 30-year mortgage has lower monthly payments but more total interest over the life of the loan. A 15-year mortgage has higher monthly payments but you own the home free and clear much sooner and pay dramatically less total interest. The right choice depends on your monthly budget, savings goals, and how long you plan to stay in the home.

How much home can I afford?

A common rule is that your total monthly housing costs plus existing debts should stay under 36% of your gross monthly income. Our calculator computes this automatically when you enter your gross income and existing debts, showing the maximum home price that fits within a 36% DTI target.

What are typical closing costs in North Carolina?

In North Carolina, closing costs typically run 2% to 5% of the home price, covering title insurance, appraisal, origination fees, taxes, and prepaid escrows. Our calculator estimates roughly 2.5% + $1,000 to give you a working number. Kim can refer you to a trusted local lender for a precise Loan Estimate.

Does this calculator work for FHA, VA, and USDA loans?

Yes. The calculator includes one-click buyer profiles for FHA (3.5% down with MIP), VA (0% down, no PMI), USDA Rural Development (0% down with a 0.35% annual guarantee fee), Conventional (20% down, no PMI), and Jumbo loans. Each profile sets reasonable defaults you can edit. Note that FHA mortgage insurance, USDA's annual guarantee fee, and conventional PMI are all structured differently — the calculator treats them generically as 'PMI' for simplicity; Kim can walk you through the actual program-specific details, and USDA loans have additional eligibility requirements (rural location and household income limits) you'll want to confirm before locking in.

Mortgage Calculator | Kim Pendergrass - Grow Local Realty

📊 Loan Details

The basics

Home Price?The price you'd pay to buy the home. Not the same as what you'll borrow — your down payment comes out of this first.

Down Payment?The cash you pay up front. Less than 20% down usually means you'll also pay PMI each month until you build enough equity.

0% 20% 100%

Less than 20% usually requires PMI

Interest Rate?The annual percentage your lender charges you. A lower rate can save you tens of thousands over the life of the loan.

Loan Term?How long you have to pay off the loan. 30-year loans have smaller monthly payments; 15-year loans have bigger payments but much less total interest.

Additional Costs (optional)

Property Tax/yr?Annual tax the county charges for owning property. In most of NC, roughly 0.8%–1.4% of home value. Usually included in your monthly payment via escrow.

Insurance/yr?Annual homeowners insurance. Typically $1,200–$2,400 in NC depending on home size and location. Also usually escrowed with your payment.

PMI Rate?Private Mortgage Insurance — insurance the lender requires when your down payment is under 20%. Usually 0.3–1.5% of the loan per year. Drops off automatically once you reach 20% equity.

HOA/mo?Homeowners Association fees — only if the property is in a neighborhood or complex with shared amenities. Usually $0 for rural homes, $25–$300/mo in subdivisions.

Income & Debts (optional, for DTI)

Gross Monthly Income?Your household income before taxes. Lenders use this to decide how much they'll let you borrow. If two people are on the loan, add both incomes.

Before taxes & deductions

Existing Monthly Debts?DTI = Debt-to-Income. The total of every minimum payment you already have each month — car, student loans, credit-card minimums. Lenders add your future mortgage to this to see if you can afford the home.

Car loans, student loans, credit-card minimums

Estimated Monthly Payment

Principal, Interest, Taxes, Insurance

You could afford up to: — Based on 36% DTI target

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A payment this size means you're shopping in the $300,000–$400,000 range. Kim knows every active home in that range across the Triangle — she can save you weeks of searching.

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💰 Payment Breakdown

Principal & Interest $0

Property Tax $0

Home Insurance $0

PMI $0

HOA Fees $0

Total Monthly $0

How you'll pay down the loan —

Principal paid Interest paid Remaining balance

📈 Debt-to-Income Analysis ?DTI (Debt-to-Income) is the percent of your gross monthly income that goes to debt payments. Lenders use it to decide if they'll approve you.

0% 28% ideal 31% max 50%

Enter your gross monthly income to see your housing ratio.

0% 36% ideal 43% conv. 50% FHA

Add your existing monthly debts to see your total debt ratio.

What is DTI?

Front-End DTI measures housing costs vs. income (aim for <28%). Back-End DTI includes all debts (aim for <36%). Most conventional loans require back-end DTI under 43%, while FHA loans may allow up to 50% with strong compensating factors.

📋 Loan Summary

Loan Amount

Down Payment

Total Interest Paid

Total Cost of Loan

Est. Closing Costs ?Closing costs are the one-time fees you pay at closing — title insurance, appraisal, origination, taxes, etc. Usually 2–5% of the home price.

Cash Needed at Closing

📅 Amortization Schedule ?Amortization is just the fancy word for the schedule of how each monthly payment is split between principal (shrinking what you owe) and interest (the lender's fee).

Month	Payment	Principal	Interest	Balance
Enter a home price to see your payment schedule.

Year	Principal Paid	Interest Paid	Remaining Balance
Enter a home price to see your yearly summary.

💰 Payment Breakdown

📈 Debt-to-Income Analysis ?DTI (Debt-to-Income) is the percent of your gross monthly income that goes to debt payments. Lenders use it to decide if they'll approve you.

📋 Loan Summary

📅 Amortization Schedule ?Amortization is just the fancy word for the schedule of how each monthly payment is split between principal (shrinking what you owe) and interest (the lender's fee).

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