Using Mortgage Payment Calculators

When trying to decide how much you can afford to pay on a mortgage one of the best tools to use is a mortgage payment calculator. Whether you are a first time homebuyer or a homeowner who is looking to refinance using mortgage payment calculators can provide a beneficial means of determining what your monthly payment (or new monthly payment) for your mortgage will be. These types of calculators can be found online and are offered at any number of banking websites. Do a Google search for the one that is most suitable for you.

 

What can a mortgage payment calculator be used to find out? You can use it to know ahead of time what the payment would be on a purchase-money mortgage if you wish to buy a home. It can also be used if you wish to refinance a mortgage or if you would like to replace the existing home loan you presently have. It can also be used for a mortgage modification that is offered by a professional who services loans.  A mortgage payment calculator can be used for many things however these are its primary functions.

 

If the loan you are contemplating offers a variable mortgage rate then you can use the mortgage payment calculator to estimate the initial payment at the rate it would start at. You can also use it to extrapolate beyond that. In other words, use it to calculate the potential future payments at either a higher interest rate or a lower interest rate. In this way a mortgage payment calculator can help to predict the future for the home loan you want to apply for.

 

Using a mortgage payment calculator is very simple once you get the hang of it. You might even want to try using a few of them to see if you get similar results. You need to enter some basic information and then the calculator will do its work by doing the math and from there you will be provided with the answer.

 

Most mortgage payment calculators are basically the same in how they work. You must enter the interest rate for your mortgage, as well as the amount for the loan and the term for it in the spaces provided on the calculator. Make sure that you type in the loan amount and not the purchase price for the house. You must do this because the loan amount takes into account the mortgage and the down payment you will be making while the purchase price does not.

 

A mortgage payment calculator that is simple in design will show a mortgage payment that includes the principal as well as the interest but nothing more. On the other hand a mortgage payment calculator that is fancier and more sophisticated will include other elements. It will include property taxes, mortgage insurance and insurance for homeowners. It is worth knowing that a great number of mortgage payments are made up of principal, interest, property taxes and homeowners insurance. This is often fondly referred to as “PITI” which is an acronym for “Principal Interest Taxes Insurance”.

 

Be aware that using mortgage payment calculators is an excellent starting point to estimate the cost of your monthly mortgage payments. However the answers you get are estimates and are in no way indicative of the precise mortgage rate you would receive. For that you would need to speak with a professional mortgage counselor or banker.