Estimated closing date - The estimated date that the actual home sale will take place. This date is used to determine the final interest due on any mortgages and any pro-rated homeowner's insurance and property taxes.

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Sale price - Price that will be paid for the home. This is the actual price of the home before any fees or expenses.

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Mortgage one balance - Balance of the first mortgage on the home.

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Mortgage one interest rate - Interest rate for the mortgage on the home. This is used to calculate any remaining interest due at the time of closing. Total mortgage payoff amount is the balance plus interest.

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Day payment is due - The day of the month your mortgage payment is due.

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Prepayment penalty - Any penalty you are required to pay if you pay off your mortgage early. Most mortgages will not have a prepayment penalty.

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Accrued interest - Interest that is due for your mortgage on the closing date. This is the number of days between your normal payment day of the month and the closing date times your daily interest rate.

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Mortgage two balance - Remaining balance on your second mortgage as of your last payment. If you do not have a second mortgage please enter $0.

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Mortgage two interest rate - The interest rate for the a second mortgage you may have on the home. This is used to calculate any remaining interest due at the time of closing. Total mortgage payoff amount is the balance plus interest. If you do not have a second mortgage this input is ignored.

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Day payment is due - Day of the month your payment for the second mortgage is due. If you do not have second mortgage this entry is ignored.

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Prepayment penalty - Any penalty you required to pay if you pay off a your second mortgage early. Most mortgages will not have a prepayment penalty.

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Accrued interest - Interest that is due on your second mortgage on the closing date. This is the number of days between your normal payment day of the month and the closing date times your daily interest rate.

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Annual property tax - Annual property taxes for your home.

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Property taxes paid through - Date that you have paid your property taxes through. This date is used to determine the prorated amount you will be credited at your closing.

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Annual homeowner's insurance - Your homeowner's annual insurance premium.

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Insurance paid through - Date that you have paid your homeowner's insurance taxes through. This date is used to determine the prorated amount you will be credited at your closing.

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Selling broker commission - Percentage of the home purchase price that the seller's broker will receive as their commission.

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Buying broker commission - Percentage of the home purchase price that the buyer's broker will receive as their commission.

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Transfer tax - Percentage of the home purchase price that is paid as a transfer tax.

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Closing fees - Any closing fees required to be paid by the seller.

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Revenue stamps - Revenue stamps tax or fee required to be paid by the seller.

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Title policy - Cost of title insurance required to be paid by the seller.

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Attorney fees - Attorney fees required to be paid by the seller.

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Recording fees - Recording fees required to be paid by the seller

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Repair allowance - Any amount paid by the seller for the repair of the home.

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Home warranty - Any amount to be paid by the seller of the home to furnish a home warranty to the buyer.

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Survey fee - Survey fee or expense required to be paid by the seller.

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Appraisal fee - Appraisal fee or expense required to be paid by the seller.

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Termite inspection - Termite inspection fee or expense required to be paid by the seller.

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Buyer funds needed at closing/cash to close - include the down payment, closing costs, prepaid items, and other fees that cannot be covered by the mortgage loan.

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Proration - in real estate involves the division of property expenses such as taxes and HOA fees between the buyer and seller based on the time each party owns the property.

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Transfer Tax - This is a local tax imposed on the sale, donation, barter, or any other mode of transferring ownership of real property.​

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Documentary Stamp Tax (DST) - This is a national internal revenue tax imposed on documents that transfer property rights, typically 1.5% of the selling price or zonal value. 

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Capital Gains Tax - A tax equivalent to 6% of the selling price or the zonal value, whichever is higher, applicable to the seller. 

 

Miscellaneous Expenses - Additional costs may include notary fees, agent commissions, and other incidental expenses incurred during the registration process. 

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Payment Procedures - Sequence of Payments: Generally, the seller is responsible for the transfer tax, but this can be negotiated. The buyer typically pays the registration fees and other incidental costs. ​

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​PITI (Principal, Interest, Taxes and Insurance) ​

1. Principal - the amount of your loan (not including interest). Most likely, it is the cost of your house minus your down payment.

2. Interest - the rate at which the lender charges you for borrowing money. To learn more, check out our interest rate calculator.

3. Tax - property tax charged at the municipal level. You can find the exact amount on the website of the county where the house is located, or get it from your real estate agent.

4. Insurance - protection for your property in case of fire, lightning, break-in, flooding, etc. Most often, it is not required by law, yet demanded by the lender.

PITI = monthly tax + monthly insurance + monthly mortgage payment

 

Capitalization rate (or Cap Rate) - is the rate of return on a real estate investment property. It is calculated by dividing the net operating income of a property by its current market value

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Loan -to -Value ratio​​ - LTV Ratio=(Loan Amount/Appraised Property Value)​×100

Risk Assessment: Lenders use the LTV ratio to evaluate the risk associated with a loan. A higher LTV ratio indicates higher risk, as it suggests that the borrower has less equity in the property. Loans with high LTV ratios may come with higher interest rates or require private mortgage insurance (PMI) to protect the lender in case of default. ​

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Loan Approval - Many lenders have specific LTV ratio thresholds that borrowers must meet to qualify for certain loan types. Generally, an LTV ratio of 80% or lower is preferred, as it indicates that the borrower has a significant equity stake in the property. 

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Interest Rates - The LTV ratio can also affect the interest rate offered to the borrower. Lower LTV ratios typically result in more favorable interest rates, while higher ratios may lead to higher rates due to the increased risk. 

 

​Discount points and loan origination fee - Discount points are a way for borrowers to prepay interest on their mortgage, reducing the interest rate. Each point generally costs 1% of the loan amount and reduces the interest rate by approximately 0.25%. Unlike origination fees, points act as a prepayment of interest.