The monthly mortgage payment is likely to be the single largest item you have to account for in your housing budget. Avoid Mortgage Calculator will help you estimate your monthly mortgage payment as you search for a buy loan or a refinance. Simply alter the inputs into the calculator to examine alternative cases. The calculator can aid in the following choices:
Customized loan terms to suit your needs
A fixed-rate mortgage for 30 years is a good choice if you know what your monthly expenses will be. These loans often have higher interest rates throughout the life of the loan but lower monthly payments. The total amount of interest you pay will be less with a 15-year fixed-rate mortgage, but the monthly payment will be greater.
If you think an adjustable-rate mortgage would work for you. It could be tempting to go with an ARM as interest rates climb. Adjustable-rate mortgages often have more affordable initial rates than fixed-rate mortgages. If you only intend to remain in your house for a few years, a 5/6 ARM might be the best option, as the interest rate is fixed for five years and then adjusted every six months. However, keep in mind that your mortgage payment may increase or decrease after the first rate period ends.
If your expenses are exceeding your income
Avoid Mortgage Calculator can give you an idea of the total monthly cost of your mortgage, including taxes and insurance.
How much of a bet to make? The conventional down payment is 20%, however, this is by no means necessary. Many borrowers just need to put down 3%.
Before anything else, in the box marked “Home price,” type the purchase price (if you’re a buyer) or the current market value of the home (if you’re a refinancing customer).
Put your down payment (if you’re buying) or your equity (if you’re refinancing) in the “Down payment” box. Equity in a home is the market value of the property minus any mortgage or other outstanding debt. You can specify either a fixed monetary amount or a percentage of the total price as your down payment.
The term “Loan Duration” comes up next. You can alter the repayment schedule according on the term you select (often 30 years, but also 20, 15, or 10).
Finally, put the rate you anticipate paying in the “Interest rate” field. The standard market rate is pre-set in our calculator, but you can change it if you like. If you’re purchasing vs refinancing, you’ll get a different interest rate.
Expenses typically covered by a mortgage payment
Principal and interest make up the bulk of your monthly mortgage payment. The main is the original loan amount, whereas interest is the cost of borrowing that money. Your lender may also need a regular monthly escrow payment, which is held separately from your loan payment and sent directly to your local tax collector and insurance company.
This is the initial sum that you took out as a loan from the lender.
Money borrowed from a financial institution will incur interest payments. Annual percentage rates are the standard representation of interest rates.
Taxes on real estate are annual charges levied by municipalities. Each mortgage payment, if you have an escrow account, will cover about a tenth of your yearly tax obligation.
Fire, wind, hail, lightning, and falling trees are just some of the perils that can be covered by a homeowner’s insurance policy. You’ll have a second policy if you live in a flood zone, and a third if you’re in Hurricane Alley or earthquake country. Just like with real estate taxes, your lender or servicer will take care of paying your insurance fee each month.