Greendoor's proprietary algorithm is made up of a series of “if, then” scenarios. Our proprietary formula creates a baseline assumption that's designed to help you decide if you should buy a property based on the monthly payment that you can afford. You can adjust the default settings in the “Refine Search” section of the platform to reflect your situation and homebuying criteria. Default settings will automatically update your down payment, interest rate, and loan type based on the monthly payment range you enter into the search criteria and will instantly show the effects in your search results.

Greendoor’s technology figures out the most relevant thing when buying a home - the total monthly payment. We determine a property's total monthly payment based on the property’s purchase price, your down payment, your interest rate, loan term, estimated property taxes, estimated homeowners insurance, estimated mortgage insurance (if applicable) and HOA (if applicable). The monthly payment includes principal, interest, taxes, insurance, mortgage insurance (if applicable), and HOA (if applicable). When you know the total monthly payment, you know how much you can afford and that the home purchase is a smart financial decision. All figures are in current United States dollars.

Purchase Price
Greendoor’s first calculations assume you plan on purchasing a property at its list price. You can use the sliders to adjust dollar amounts if you'll offer more or less

Financing
To calculate the monthly mortgage payment we initially assume that you will have a 5% down payment on a 30-year fixed amortized loan at the current estimated market interest rate. You can change your financing to fit what you are qualified for. If you're using all cash without any financing, simply slide your down payment to 100%.

Refine Search / Save Search
Refine search is a way for you to override the system and customize the search results to your own homebuying criteria. Once you save a search you are able to get alerts on future properties that hit the market that match your criteria. You can override the financing (down payment, loan term, and interest rate), Monthly Payment range, Deal Type (foreclosure, fixer upper, short sale, price reduced), and other basic property specific filters like beds, baths, square feet, and year built

Property Tax (Expense)
Property tax varies by locality. We use a national baseline assumption of 1.25%. For example, Hawaii tends to have some of the lowest property taxes while New York and Florida tend to have the highest.

Homeowner's Insurance (Expense)
Homeowner’s insurance is typically required by mortgage lenders. This number can be significantly higher if you pay high premiums for natural disasters and other risk factors such as floods or earthquakes. Landlord Insurance should be purchased as well if you're planning on renting out the property. Short-term rental hosts can even purchase special vacation rental insurance.

Homeowners Association (HOA) Fee(s) (Expense)
These are the monthly condominium or homeowners' association fees, if applicable. We bring in the HOA fees based on the information that is inputted into the MLS by the listing agent.

*Warning: Many HOAs do not allow short-term rentals (rentals under 30 days) so please check with your Realtor and read the HOA docs before purchasing a property to rent out on Airbnb or VRBO.

Mello-Roos (Expense)
These are special property taxes imposed to help finance major improvements and services within a particular district. Special bonds and taxes used for Mello-Roos financing can only be issued by counties or districts in which two-thirds of the voters in the area have voted in favor of becoming a Mello-Roos district.

Down Payment
A down payment is the share of the purchase price that you pay upfront with your own funds. Our baseline assumption is 5%. Unless you are a Veteran using a VA loan, putting less than 20% down typically requires monthly mortgage insurance. VA loans, USDA Rural loans, FHA loans, CALHFA loans, Non-QM loans, and special Fannie Mae / Freddie Mac loan programs - Home Ready, Home Possible, HomeOne allow for lower down payments, but you must live in one of the units. For example, you can buy a 4-plex property, live in one of the units and rent out the other 3 with 3.5% down on an FHA loan, or with 0% down on a VA loan.

Length of Mortgage
This is the number of years until the mortgage is paid off. Our baseline assumption is 30 years. Some mortgages have shorter terms, such as 15 years.

Interest Rate
The interest rate is the portion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the outstanding loan. Owner-occupied rates on Conventional, VA, USDA, CalHFA, FHA and Non-QM loans are less than non-owner occupied investment property rates, while hard money rates (typically used when flipping a home) can be much higher. Slide to the rate that you are

1031 Exchange
Allows investors to sell a property to buy another for business or investment purposes without being taxed on any gains made from the original purchase.

Appraisal
The valuation of a property by an authorized person to determine the appropriate value to assign. This includes the current market value of similar properties, the quality of the property, and the valuation models.

Basis
Used as a baseline of value for a property. It is the original purchase price, plus any improvements made, minus losses and depreciation over time

Closing Costs for Buyers
These are fees incurred on top of the purchase price and will be laid out in the final HUD-1 settlement statement. Fees typically include mortgage points, appraisal fees, loan origination fees, title insurance, fees for running a credit report, and any other imminent costs

Closing Costs for Sellers
Fees incurred throughout the home's selling process and that will be laid out in the final HUD-1 settlement statement. They include the real estate agents' commissions, transfer taxes, title insurance fees, and other closing costs when selling a home.

Escrow
The buyer of a property will deposit the payment amount for the house in an escrow account held by a third party until all conditions are met. This assures the seller that the buyer is able to make the payment. Once all of the conditions to the sale are satisfied, the escrow transfers the payment to the seller, then the title is transferred to the buyer.

Fair Market Value
This is the estimated market value of a property based on what an informed rational buyer is willing to pay an informed, rational, willing seller. Fair market value estimates may be founded either on precedent or extrapolation (calculation). Fair market value differs from the intrinsic value that an individual may place on the same asset based on their own preferences and circumstances.

FHA loan
A mortgage loan that’s Federal Housing Administration (FHA) backed and provided by an FHA-approved lender. Loans that are FHA insured are a form of federal assistance and historically have allowed lower-income Americans to be able to borrow money and purchase a home they wouldn’t be able to otherwise afford. FHA loans only require a 3.5% down payment since they’re backed by the government’s insurance. You must live in the property to qualify for an FHA loan.

Guest
A guest is a traveler who rents out a room, entire house or apartment from a vacation rental host. Guests choose vacation rentals over hotels for the convenience, flexibility and/or price savings

Home Inspection
The examination of a property's condition, usually for a property's sale. A home inspection assesses the condition of a property's roof, foundation, plumbing, heating and cooling systems, water and sewage, electrical work, and some fire and safety issues.

Home Warranty
A warranty policy that a homeowner, buyer, or seller purchases to cover any unexpected repairs or replacements of major components and appliances in a home.

Host
Airbnb promotes “becoming a host” to homeowners and vacation homeowners to earn money by sharing their homes with travelers. Hosts can rent out rooms, entire houses, or apartments.

Inflation
Inflation is an increase in the general level of prices for goods and services, lessening the value of a dollar. In real estate, inflation has an impact on costs like utilities and renovations, which are assumed to increase at the going rate of inflation.

Lender Fees
A fee charged by the lender for processing a new loan application. It is used as compensation for putting the loan in place. They are quoted as a percentage of the total loan and are generally between 0.5% and 1%.

Loan Officer
An NMLS licensed person who helps borrowers obtain mortgage loans from banks or other lending institutions.

Long Term Capital Gains Tax
Gains on assets held for more than one year, taxed at a lower rate than short-term gains. Assessed on the selling price of a primary residence exceeding the original purchase price by $500,000 (if filing as married), or $250,000 (if filing as an individual). Your individual tax situation may be different, so please speak with a tax professional. Capital gain taxes can be delayed or avoided through 1031 exchange(s).

Military Service
Most active duty service members, veterans, and reservists are eligible for a VA loan. Issued by mortgage brokers, VA loans are guaranteed by the Department of Veterans Affairs (VA). They don’t require a full down payment, nor do they require private mortgage insurance. But, VA loans do require an upfront funding fee.

The VA funding fee can be avoided if the veteran has a service-related injury. Otherwise, the VA typically charges 2.15% of the purchase price for first-time use and 3.3% for subsequent use. VA loans require that the property be owner-occupied, but veterans can buy a 2 - 4-unit property and live in one of the units.

Mortgage Insurance (MI)
A percentage of the original loan amount added every year. It's typically included in cases where the down payment is less than 20%. It can usually drop to zero during the year after the outstanding loan balance has decreased to less than 80% of the value of the home. You can also opt for lender paid mortgage insurance (LMPI). FHA loans require monthly mortgage insurance no matter what the circumstances.

Real Estate Agent
A real estate agent is a person licensed to represent a buyer or a seller in a real estate transaction in exchange for a commission. Most real estate agents work for a broker and are part of the National Association of Realtors.

Self Directed IRA
This is a retirement account in which the individual investor is in charge of making all investment decisions. It provides the investor with a greater opportunity for asset diversification.

Title
The title is the certification of ownership of a property.

Triple Net Lease (NNN)
A lease agreement that designates the tenant as being solely responsible for the net real estate taxes on the leased asset, the net building insurance, and the net common area maintenance. Because the tenant is covering these costs, the rent is typically lower, but the landlord has fewer headaches and management responsibilities.

Utility (Expense)
These include electric, water, trash and sewage and are typically higher for homeowners and landlords than they are for renters. Every homeowner and landlord should account for these expenses based on the averages in the area.

Vacancy Rate (Expense)
The percentage of the time that the property is vacant and ready to be rented. During the time that a property is vacant, landlords are not collecting rent. The vacancy rate is the opposite of occupancy rate. Example: a 30% vacancy rate equals a 70% occupancy rate.

Vacation Rental / Short-Term Rental
A vacation rental is a property other than the owner’s primary residence that is used for recreational purposes and rented out on a temporary basis to tourists as an alternative to a hotel. Vacation rentals differ from long-term rentals in the fact that they are churned with a lot more tenants, thus oftentimes harder to manage.