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Reading your Mortgage Plan

Learn what every number on your Mortgage Plan means and how to compare your options.

Start step 15 lessons, about 10 minutes
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The opening of a Mortgage Plan: “Erica’s Mortgage Plan,” a short note from Daniel, and three loan options side by side, each with its monthly payment and cash to close.

Steps

  1. Reading your Mortgage PlanYour Mortgage Plan shows each loan option as a card with its payment and cash to close. Tags state facts, and every Breakdown adds up exactly.2 minfrom Stage 3: Shopping smart
  2. Rate vs APRInterest rate and APR measure different things. The rate sets your payment; the APR adds points, fees and mortgage insurance as a yearly cost.2 minTry it: Rate and APRfrom Stage 3: Shopping smart
  3. Points and the break-evenMortgage points are prepaid interest that lower your rate. They pay off only if you keep the loan past the break-even month.2 minTry it: Points break-even calculatorfrom Stage 3: Shopping smart
  4. Cost over timeThe lowest payment is not always the lowest total cost. Add up closing costs, interest and mortgage insurance for the years you will keep the loan.2 minTry it: Amortization: where each payment goesfrom Stage 3: Shopping smart
  5. Cash to close, explainedCash to close is your down payment, closing costs and prepaids, minus your deposit and any credits. Confirm wire instructions by phone before you send it.2 minTry it: Cash to closefrom Stage 5: Closing
  6. At the end: see it with your own numbersDaniel builds your Mortgage Plan: every option that fits, side by side, with your payment, cash to close and cost over time.

Your next step

Step 1 of 5Reading your Mortgage PlanYour Mortgage Plan shows each loan option as a card with its payment and cash to close. Tags state facts, and every Breakdown adds up exactly.Start step 1