Iowa Mortgage Calculator

Best mortgage lenders in Iowa

The most popular mortgage lenders in Iowa operate nationwide. These include such recognizable names as Morty Inc, AmeriSave, Rocket Mortgage. Several lesser known but trustworthy options include Iowa-based Iowa Mortgage Solutions, Iowa Bankers Mortgage Corporation.

How to calculate mortgage payment in Iowa

Use our quick and straightforward mortgage calculator IA to evaluate your future monthly expenses. Below, you'll find a comprehensive set of step-by-step instructions.

Why and How to Use Our Mortgage Calculator

Use our house payment calculator Iowa for thorough planning of your future spendings. Let’s take a closer look at each field in order to gain a better understanding of the mortgage in Iowa parameters.

The initial piece of the puzzle involves determining the home price – in other words, the amount you intend to spend on your future property. The down payment represents the portion of this price that you need to pay upfront. To avoid costly insurance premiums, it's crucial to come up with a minimum of 20% down payment, especially for conventional loans. The remaining sum constitutes the principal, which equates to 80% of the home price when you have a 20% down payment.

The loan term refers to the period within which you'll fully repay your mortgage by making scheduled payments. Fixed-rate conforming loans typically have a maximum term of 30 years, while adjustable-rate options generally come with shorter terms.

An interest rate is a fixed or variable percentage of the principal amount that you're obligated to pay throughout the loan's duration. It's important to note that you're actually charged an annual percentage rate (commonly abbreviated as APR), which isn't precisely the same as the interest rate. Although the interest rate accounts for the majority of the APR, the latter also encompasses various fees, such as origination fees, closing costs, and insurance payments, among others.

For more precise assessment, the interest rate used for these calculations is based on the current mortgage rates in Iowa, given a $400,000 home price and a 10% down payment.

Median property taxes in Iowa counties

Property taxes represent another crucial factor to take into account when choosing your prospective home. Several lenders require the establishment of a mortgage escrow account to guarantee that the borrower remains current with their tax and insurance expenses.

Source: American Communities Survey 2016, U.S. Census

Iowa Housing Market 2024

The past year has seen a steep increase in the market value of housing in Iowa. This perpetuates a well-established pattern that was magnified by the COVID-19 pandemic. However, the rate of expansion has slowed compared to the previous year, even as both purchase and refinance rates have been steadily climbing for a while and are anticipated to continue rising in the near term.

How do I calculate my mortgage payment?

The most efficient approach to accomplish this is by utilizing our calculator. It operates based on a straightforward formula, which you can also employ manually to calculate the payment amount:

M = P*i(1 + i)^n / (1 + i)^n – 1

M – estimated monthly mortgage payment;

P – principal;

I – monthly interest rate (to determine it, divide your annual mortgage rate by 12);

N – the loan term expressed in months (in other words, the overall number of monthly payments)

Imagine you are applying for a 15-year mortgage loan with a fixed 6.99% APR (which is .0699 as a unit fraction). The house costs $500k, with 10% ($50,000) to be paid down. The principal amount (P) will be equal to 90% of the initial home cost ($500,000 – $50,000 = $450,000).

I = .0699 % / 12 = .005825%.

Finally, let’s convert the loan length from years to months: N = 15 * 12 = 180.

M ($) = 450,000*.005825(1 + .005825)^180 / (1 + .005825)^180 – 1 ≈ 4042.

So, you are going to pay about $4042 a month.

It is important to note that the calculated M value is approximate, as no extra fees are taken into account.

Tips for first-time home buyers in Iowa

To begin, various federal agencies such as USDA, FHA, and VA offer loan guarantees to specific borrowers, providing numerous options that align with the financial constraints of many first-time homebuyers.

Besides these government-guaranteed programs, it is worth considering some offers from UHC (Iowa Housing Corporation) available to Iowa. Specifically, first-time homebuyers meeting the criteria for an FHA loan with a minimum FICO score of 660 can apply for the FirstHome program, which offers assistance with down payment and closing costs. This option covers up to 6% of the loan amount for either down payment or closing costs but is structured as a 30-year fixed-rate second loan. If you don't qualify for the FirstHome program, there's no need to lose hope. The Iowa Housing Corporation also offers the Housing Score Loan, an alternative program that covers up to 4% of the loan amount, with a minimum acceptable credit score of 620.

Here are some helpful tips for first-time homebuyers:

1. Get pre-approved in advance. This will enhance your creditworthiness in the eyes of home sellers. It's highly recommended to obtain pre-approval letters from not just one, but at least two or three different lenders.
2. Compare different mortgage rates. Consider at least three lenders; the more options, the better.
3. Perform preliminary financial calculations based on the amount for which you have been pre-approved. This will help you plan your future expenses more effectively.
4. Start saving for a down payment as early as possible and set aside as much as you can. A larger down payment reduces the principal amount, which, in turn, can decrease your potential expenses. So, it's important to begin saving well in advance.
5. If you are eligible for a VA loan, prioritize this option.
6. Explore government-backed programs and local assistance programs. These can offer tempting opportunities, so be sure not to miss out.
7. Pay off existing debts whenever possible to improve your financial situation and enhance your eligibility for favorable loan terms.