Rhode Island Mortgage Calculator

Best mortgage lenders in Rhode Island

The most popular mortgage lenders in Rhode Island operate nationwide. These include such recognizable names as Embrace Home Loans, Morty Inc, Beeline.

How to calculate mortgage payment in Rhode Island

Use our simple mortgage calculator RI to evaluate your future monthly expenses. A detailed step-by-step instruction follows below.

Why and How to Use Our Mortgage Calculator

Use our house payment calculator Rhode Island for thorough planning of your future spendings. Let's delve into each field to gain a deeper understanding of the mortgage in Rhode Island parameters.

The initial consideration is the home price, which represents the amount you intend to invest in your prospective property. The down payment constitutes the upfront payment portion. To avoid costly insurance, it's advisable to provide a minimum down payment of 20%, particularly in the case of a conventional loan. The remaining sum comprises the principal, equivalent to 80% of the home price when a 20% down payment is made.

Next, the loan term denotes the duration for full repayment of your mortgage through scheduled payments. Fixed-rate conforming loans typically have a maximum term of 30 years, while adjustable-rate options often feature shorter terms.

The interest rate is a fixed or variable fraction of the principal that you'll be required to pay over the loan's duration. It's important to note that you are actually charged an annual percentage rate (APR), which isn't identical to the interest rate. While the interest rate constitutes a significant portion of the APR, the latter encompasses various fees, such as origination fees, closing costs, insurance payments, and more.

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

Median property taxes in Rhode Island counties

Property tax is a vital consideration when choosing a future home, and many lenders require a mortgage escrow account to ensure the borrower stays current on taxes and insurance payments.

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

Rhode Island Housing Market 2024

Over the past year, there has been a significant increase in the market value of housing in Rhode Island, continuing a long-standing trend that was further amplified by the COVID-19 pandemic. However, it's important to note that the pace of this growth has slowed compared to the previous year. Meanwhile, both purchase and refinance rates have been steadily increasing for some time and are expected to rise further in the near future.

How do I calculate my mortgage payment?

The most convenient way to do this is to make use of our calculator. It's powered by a simple formula, which you can also use to calculate the amount to be paid by hand:

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 Rhode Island

Firstly, there are several federal agencies, including USDA, FHA, and VA, that offer loan guarantees to eligible borrowers, providing numerous options that align with the financial constraints of many first-time homebuyers.

In addition to these government-backed programs, it's advisable to explore offerings from the UHC (Rhode Island Housing Corporation). Specifically, first-time homebuyers can apply for the FirstHome program, which provides down payment and closing cost assistance, provided they qualify for an FHA loan with a minimum FICO score of 660. This option covers up to 6% of the loan amount for down payment and/or closing costs but is available in the form of a 30-year-fixed-rate second loan. If you don't meet the criteria for the FirstHome program, don't lose hope. The Rhode Island Housing Score Loan offers an alternative, covering up to 4%, with a minimum acceptable credit score of 620.

For those embarking on their homeownership journey, here are some valuable tips:

1. Secure pre-approval in advance, enhancing your credibility in the eyes of potential home sellers. It's advisable to obtain pre-approval letters from at least two or three different lenders.
2. Compare mortgage rates from different lenders, considering at least three options to make an informed decision.
3. Conduct preliminary financial calculations based on your pre-approved amount to effectively plan your future expenses.
4. Begin saving for a down payment as early as possible to reduce the principal amount and, consequently, potential expenses.
5. If eligible, prioritize exploring VA loan options.
6. Don't overlook government-backed plans and local assistance programs, as they may present attractive opportunities.
7. If feasible, work towards paying off any existing debts to improve your financial standing and enhance your ability to secure a mortgage.