A Complete Guide To A $100,000 Mortgage

When buying a home, the amount you’ll pay per month varies dramatically based on the loan amount, loan term and interest rate. As you start your home search, it’s helpful to have a general idea of a monthly mortgage payment – from a starting off point. Understanding how much a $100,000 mortgage payment will cost you can be that starting price.

Monthly Payments On A $100K Mortgage

When you purchase a home, the monthly mortgage payment is composed of several separate costs. Below is a closer look at the different components of a mortgage payment:

• Principal: The principal is the part of your monthly payment that pays down the loan balance. In general, the principal component of your payment grows. That means, over time, more of your monthly payment will go toward paying down your principal.

• Interest: The interest component is the amount you pay the lender for borrowing the funds. In general, you’ll pay more in interest payments toward the beginning of your loan.

• Taxes: Many lenders tuck a portion of your monthly payment into an escrow account, which can be used to cover your future property taxes. When the tax bill is due, the lender will use the funds you’ve already committed.

• Insurance: Like taxes, your home insurance costs may be held in an escrow account. Throughout the year, a portion of your monthly payment will be set aside for your homeowners insurance.

• Private mortgage insurance (PMI): If you default on your loan, PMI offers financial protection for lenders. In general, PMI is included as a part of your mortgage payment if you make a down payment of less than 20%.

What To Expect: Monthly Payment Estimations

If you want to purchase a home with a $100,000 mortgage, the monthly payment varies based on the loan term you choose and current interest rates.

The table below breaks down how much you can expect to pay per month on a $100,000 home loan. The monthly payment indicated includes the principal and interest component of the loan only. It doesn’t include any property taxes, homeowners insurance or mortgage insurance, which vary based on your location and down payment amount.

Requirements For A $100K Mortgage

With a better idea of what a $100,000 mortgage would cost you each month, it’s helpful to understand what requirements you’ll need to hit to qualify for this size loan.

Below we explore the eligibility requirements and the upfront costs you might face when taking out a $100,000 mortgage.

Eligibility Requirements

While every lender can set their own requirements, most will expect borrowers to meet the following requirements.

• Credit score: In general, lenders typically require a credit score of at least 620 for a conventional loan and 580 for a government-backed loan, like an FHA or VA loan.

• Income: Lenders want to ensure you have enough money and a steady flow of income to afford a monthly payment.

• Debt-to-income (DTI) ratio: In addition to your new mortgage payment, lenders generally want your total debt payments to equal less than 50% of your monthly income.

• Employment history: Most lenders expect prospective borrowers to have at least 2 years of consistent employment.

Upfront Expenses

When taking out a mortgage, the monthly payment isn’t the only cost you’ll face. Below is a look at the upfront costs to keep in mind:

• Down payment: Most buyers need to make a down payment of some kind. While people believe 20% is required, you may be able to put as little as 3% down – depending on your loan. Still, the average first-time home buyer put down 7% in 2021. For a $100,000 home loan, that’s $7,000.

• Closing costs: Closing costs include things like the appraisal fee, title fees and mortgage origination fees. On average, closing costs run between 3% - 6% of the purchase price.

How Much Total Interest Will You Pay On A $100,000 Mortgage?

The total amount of interest you’ll pay on a $100,000 varies based on the interest rate and the length of your loan.

For example, let’s say that you’re taking out a $100,000 home loan with a 30-year loan term and 6.5% interest rate. You would pay $127,544 in interest payments over the life of the loan. But if you opted for a 15-year mortgage with the same interest rate, you’d pay $56,799 in interest over the loan term.

Amortization Schedule For A $100K Mortgage

An amortization schedule maps out how much of your monthly payment will go toward principal and interest over the course of your loan. As your loan ages, the amount you’ll put toward the loan balance increases and the interest charges decrease.

In the table below, you can see how the payments shake out over a 30-year term for a $100,000 mortgage loan with a 6.5% interest rate.

Now, let’s take a look at the amortization schedule of a 15-year loan with a 6.5% interest rate.

How To Get A $100,000 Mortgage

If you’re ready to get a mortgage, it’s time to take action. Follow the steps below to get a $100,000 mortgage.

Step 1: Apply For Preapproval

Applying for preapproval is the first step to getting a mortgage. When you are preapproved for a home loan, you’ll have a better idea of how much a lender is willing to lend you. Since lenders take a look at your assets and income, you can start your home search with a realistic idea of how much you can spend.

Step 2: Make An Offer On A Home You Love

With a preapproval in hand, it’s time to find a home that works for your situation. When you find the right home, you can confidently make an offer.

Step 3: Secure The Details

When the seller agrees to your offer, it’s time to finalize the home loan. At this point, an underwriter will take a closer look at your finances and the property you want to buy.

The lender might want to see your bank statements or tax returns. Additionally, the lender will likely require the home to be appraised. It’s recommended you also get it inspected. If all goes well, this process will culminate in a Closing Disclosure, which outlines the details of the home loan.

Step 4: Close On The Home Loan

Finally, you’ll close on the loan. At the closing table, you’ll need to pay for any closing costs and sign a ream of documents to finalize the purchase.

FAQ About A $100K Mortgage

You have questions about a $100,000 home loan. We have answers.

What will the monthly payment be for a $100K mortgage?

The monthly payment for a $100,000 mortgage varies based on the loan term, interest rate and other factors. But as a general range, you can expect to pay somewhere between $550 and $850 on a monthly payment.

How much is the down payment for a $100K mortgage?

The down payment for a $100,000 mortgage varies based on your situation. Some borrowers (like those who qualify for a VA loan) may be able to qualify for a 0% down payment. Others may choose to put down 20%, which amounts to $20,000. But you may be able to put down as little as 3%, which would be a $3,000 down payment on a $100k mortgage.

The Bottom Line

If you want to purchase a home with a $100,000 loan, understanding the details can make it easier to jump in. While the costs will vary based on your unique situation, it can help to run the numbers before starting your home search. If you’re ready to buy a home with a $100,000 mortgage, start the approval process with Rocket Mortgage^® today.