Message from Alex
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Message from Alex
Sarah and Michael — watch my short video below, then review three loan paths for your new home on Maple Ridge Drive. Each option balances monthly payment, cash needed at closing, and long-term equity growth differently. Let me know which direction feels right for your family.
Alex Morgan
Senior Loan Officer
01
Your Loan Options
Conventional 5% Down
Conventional•6.750%•30-year
Total Monthly Payment
$3,569/mo
Cash to Close
$27,600
Loan Amount
$427,500
Down Payment
$22,5005.0%
APR
6.920%
Payment Breakdown
- Principal & Interest$2,773
- Taxes$468
- Insurance$142
- Mortgage Insurance (drops off year 12)$186
Est. Equity
$120,355
Net Cost
$121,371
Standard conventional financing with private mortgage insurance until 20% equity is reached.
FHA 3.5% Down
FHA•6.875%•30-year
Total Monthly Payment
$3,711/mo
Cash to Close
$22,320
Loan Amount
$441,849
Down Payment
$15,7503.5%
APR
7.240%
Payment Breakdown
- Principal & Interest$2,903
- Taxes$468
- Insurance$142
- Mortgage Insurance$198
Est. Equity
$106,314
Net Cost
$138,644
FHA program with upfront mortgage insurance premium financed into the loan. Lower down payment requirement.
5/6 ARM 5% Down
ARM•6.125%•30-year
Total Monthly Payment
$3,380/mo
Cash to Close
$27,450
Loan Amount
$427,500
Down Payment
$22,5005.0%
APR
6.780%
Payment Breakdown
- Principal & Interest$2,598
- Taxes$468
- Insurance$142
- Mortgage Insurance (drops off year 12)$172
- Est. P&I after adjustment (year 6+)$2,848
Est. Equity
$123,256
Net Cost
$106,966
Adjustable-rate mortgage fixed for the first 5 years, then adjusts annually based on market index plus margin. Projections past year 5 assume the rate adjusts to 7.125%.
02
Side-by-Side Comparison
| Metric | Conventional 5% Down | FHA 3.5% Down Lowest Cash to Close | 5/6 ARM 5% Down Lowest Monthly PaymentLowest Net CostFastest Equity Build |
|---|---|---|---|
| Loan Type | Conventional | FHA | ARM |
| Interest Rate | 6.750% | 6.875% | 6.125% |
| APR | 6.920% | 7.240% | 6.780% |
| Term | 30-year | 30-year | 30-year |
| Down Payment | $22,500 (5.0%) | $15,750 (3.5%) | $22,500 (5.0%) |
| Loan Amount | $427,500 | $441,849 | $427,500 |
| Monthly P&I | $2,773 | $2,903 | $2,598 |
| Est. P&I After ARM Adjustment | — | — | $2,848 |
| Total Monthly Payment | $3,569 | $3,711 | $3,380 |
| MI Drops Off | Year 12 | Life of loan | Year 12 |
| Cash to Close | $27,600 | $22,320 | $27,450 |
| Closing Costs | $8,420 | $9,150 | $8,850 |
| Total Interest | $140,184 | $147,668 | $126,769 |
| Principal Paid | $26,181 | $26,490 | $29,083 |
| Remaining Balance | $401,319 | $415,359 | $398,417 |
| Est. Home Value | $521,673 | $521,673 | $521,673 |
| Est. Equity | $120,355 | $106,314 | $123,256 |
| Total Paid | $241,725 | $244,958 | $230,222 |
| Net Cost (After Equity) | $121,371 | $138,644 | $106,966 |
03
Visual Comparison
Monthly Payment Breakdown
Cash to Close
5-Year Cost: Total Paid vs. Net Cost
Net cost subtracts the equity you build — the true cost of each path.