General Monthly Payment Mortgage Calculator
Posted on March 12 By MLP Lending Guide
Did you know that you can figure out your own monthly mortgage payment amount by using a mortgage calculator? By figuring out what your payments will be every month, you can have a better understanding of what price range to look in for the house you want to purchase based on your other debt obligations and your household income.
In order to use a monthly mortgage calculator, there are some important things to know such as:
- You will need to have some general information to put into the mortgage calculator like your interest rate, the amount of the loan, what type of interest rate it is, and the length of time you are planning to borrow the money for. For instance, if I am wondering what my monthly mortgage payment would be if I borrowed $150,000 to purchase a home at an interest rate of 6% for a term of 30 years with a fixed rate, I would input this information into the mortgage calculator and it would tell me my monthly mortgage payment amount would be $899.33 per month.
- The monthly payment you get from your mortgage calculator does not include your property taxes and homeowners insurance. Your mortgage lender may require you to have an escrow account. An escrow account is a separate account from your mortgage loan where you pay extra money every month with your mortgage payment and that extra money is put into the escrow account in order to pay the property taxes and homeowners insurance. The lender does this to ensure that the home is safeguarded from damage and any federal liens that may result from not paying these necessary home expenses.
- You can use a monthly mortgage calculator to get on a budget. If you know the interest rate you are going to qualify for with your lender, then you can put in many different house price amounts and figure out for yourself how much you are willing to pay for a home in order for it to fit into your budget. If you know that you like to spend a lot of money traveling, or on an expensive hobby, then you can purchase a home for a lower value than the lender approved you for so that you have more money left over every month for yourself.
- You can use the monthly mortgage calculator to save you money on your mortgage. If your lender offers you a choice of various loan types you can input the information into a mortgage calculator in order to see what the best deal is. For instance, if you are taking out a $100,000 mortgage and your lender has offered you a choice between borrowing the money with a 6% interest rate or borrowing with a 5% interest rate by paying 3 points now (a point is worth 1% of the loan value), then with the 6% loan according to a mortgage calculator you will end up paying $599.55 a month with a total of $215,838 paid for the loan over 30 years, and with paying 3 points now and getting a 5% interest rate you will have to pay $3,000 up front, but your payments would be $536.82 per month with a total of $193,255.20 paid for the loan over 30 years. By taking the deal with the 5% interest rate, you would save a total of $19,582.80 over 30 years.
When you are shopping for a mortgage, you should use a mortgage calculator to figure out your monthly payments in order to budget your income and expenses, but also use the calculator to get the best deal on your loan possible.
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