How do I calculate my mortgage payment?
The formula to calculate by hand is quite complex, so we recommend using our New Mexico mortgage calculator. But if you’d like to manually compute it, the formula looks like this:
To get your monthly mortgage payments with our calculator, enter your mortgage loan amount (there’s an option to enter your down payment amount as well), the term of your loan, and the rate you expect to get number of years you have to repay your mortgage. Keep in mind that the higher your credit score, the more likely you are to get the most competitive rate.
In addition to the principal and interest, add monthly insurance costs, taxes, and other fees. Property taxes and origination fees are sometimes rolled into the loan.
What other costs do I have to pay?
There are other monthly expenses to account for, like homeowners insurance and property taxes. To enter these additional costs into the above mortgage calculator for New Mexico, just click “Additional inputs” (below “Mortgage type”).
When you use our New Mexico mortgage calculator, remember that property taxes paid as a percentage of owner-occupied homes are on average 0.68%, but may be different in your county. Homeowners may also be part of a homeowners association (HOA) and have to pay a monthly HOA fee on top of their mortgage payment. HOA fees usually cover the maintenance of common areas, and often include services like trash pickup. You may also need to account for private mortgage insurance (PMI). Homeowners pay PMI if they don’t make at least a 20% down payment on their home.
Our tool will help break down your costs so you can see what your monthly mortgage payments will look like in different scenarios. If you want to refinance an existing mortgage, our New Mexico calculator can also help you determine your monthly payment — and you can check out our list of the best refinance lenders to get that process started.
Things to know before buying a house in New Mexico
New Mexico mortgage rates are relatively low right now. Despite mortgage rates rising the past several months, mortgage rates are still historically low. Before you buy a home in New Mexico, it’s important to make sure you have your finances in order so you can get the most competitive rates. You need:
There are also specific issues you should be aware of when buying a home in New Mexico. New Mexico has one of the most diverse landscapes in the US, ranging from desert to grasslands, mountains, and mesas.
Despite the 20% increase in home values this past year, homes in New Mexico are relatively cheap compared to homes in California and Arizona. It is important to know what you want, find the ideal location, and work with the right agents and mortgage lenders to find the best price and rates.
Learn more: Home buyer checklist
Tips for first-time home buyers in New Mexico
There are several programs available for first-time home buyers through the New Mexico Mortgage Finance Authority (MFA), a quasi-governmental entity that provides financing for low- and moderate-income New Mexicans. Using funding from housing bonds, tax credits and other federal and state agencies, the MFA provides financing and resources to build affordable rental communities, rehabilitate aging homes, and supply down payment assistance, affordable mortgages, and other services to New Mexicans.
To qualify for the New Mexico MFA mortgage program, homebuyers need to have a minimum credit score of 620, receive pre-purchase home buyer counseling, and contribute at least $500 from their own funds.
First-time home buyer loans and programs
Here are other first-time home buyer programs to consider and explore:
- FHA loans are mortgages back by the Federal Housing Authority, and require a 3.5% down payment.
- VA loans are for military service members, and require a 0% down payment.
- USDA loans are government-backed loans for eligible properties, and require a 0% down payment.
- Fannie Mae and Freddie Mac are conventional loans that require a 3% down payment.
Decide on a budget
Once you have decided on the best program and have shopped around with lenders, decide on a home-buying budget. Many experts recommend that your monthly house payment (including additional costs) be no more than 30% of your monthly income.
It is also important to maintain a good credit score, so don’t apply for credit cards or other loans right before your house search. Credit report inquiries impact your credit score. You should also have enough money saved for closing costs. Other fees such as loan fees, inspections, and processing costs are not usually covered by the loan.
Read more: Best mortgage lenders for first-time home buyers
Still have questions?
Here are some other questions we’ve answered: