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Which offer costs less · Lesson 3 of 9
Lender fees are treated as paid up front
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Points and other prepaid finance charges are not added to the loan balance. They count on day one.
Why the balance does not grow
Some quotes fold origination charges into the amount you borrow. This calculator does not. The balance starts at price minus down payment and only falls as you pay principal.
The fee estimate comes from the APR. APR is the rate that makes the note-rate payments worth the loan minus prepaid finance charges. The fee is the loan minus that present value.
What that fee includes
It is an estimate of charges already baked into the APR gap, not a line-by-line closing disclosure. It will not list appraisal, title, or recording fees unless those charges are what pushed the APR above the note rate.
If your APR equals the note rate, you will see no extra lender fee here even if you still pay third-party costs. Type those only if you want them in your own notes. There is no separate cash-to-close field.
How the fee is used
In the offer comparison, each side’s fee is added to the interest paid during the hold. That sum is the cost. The lower sum wins.
Because the fee is paid at the start, a short hold makes fees matter more, and a long hold makes the note rate matter more.
This explains how WiseCalculator treats the numbers you type. It is not a lender’s offer and it is not advice for your loan.
More in Home
- How the APR gap becomes a dollar feeThe payment is built from the note rate. The APR then implies how much of the loan was not really financed.
- A 15-year mortgage versus a 30-year mortgageThe shorter term raises the loan payment and cuts the interest. Housing costs around the loan stay the same.
- How to read the mortgage balance chartThe chart is the remaining loan balance after each payment. It is not the housing total and it is not your equity.