Use the Mortgage Calculator below if want an estimate on what you can reasonably afford in this market. However, if you’d like to learn more about how this tool works and how your mortgage loan is calculated, then keep reading.
If you’re like the majority of the population, you’re probably going to need to take out a loan of some sorts to pay for your home. Unless you have a ton of cash in the bank and can place a cash offer on a home, you’re going to need to educate yourself on the financial nuances of buying a home. One of those nuances, is a mortgage. According to the Consumer Financial Protection Bureau, a mortgage is “an agreement between you and a lender that allows you to borrow money to purchase or refinance a home and gives the lender the right to take your property if you fail to repay the money you’ve borrowed.”
In other words, if you can’t afford the mortgage on your home, you could loose it. That’s why it’s so important to make sure that you can afford the monthly payments before you purchase one.
You will need to have a few things in check before using the mortgage calculator. Know your home price, down payment, interest rate and amortization period. Here is a quick breakdown of how you can use the mortgage calculator and what each section means for you.
In the “Down payment” section, enter the amount of your down payment if you’re buying. Usually this is around 20% of the home price if you have a conventional loan. If you are refinancing, enter the amount of equity you have. A down payment is the cash you pay upfront for a home, and home equity is the value of the home, minus what you owe.
In the “Interest Rate” section, enter the current market interest rate. Interest rates are controlled by the Federal Reserve. You can check what the current rates are by clicking on this link here.
In the “Amortization Period“, enter how many years it will take to pay off your loan. In most cases, people request a 30 year amortization period. Keep in mind, the shorter your amortization period, the less you pay in interest but monthly payments are higher. The longer your amortization period, the more you pay in interest but your monthly payments are lower in comparison.
You can also expect the following to be included in your mortgage payments:
This mortgage calculator wont be the only thing you need to figure out if you can afford a home. Get your free, step by step Home Buyer’s Guide and learn everything you need to know about buying a home.
Have an expert guide you through the process. Whether you’re curious about buying, selling, or renting — Srbuhy will answer any questions you may have. Feel free to call her. If you prefer a consultation on your terms, choose a time and day to talk! During your consultation, Srbuhy will discuss your goals and circumstances to define what the best plan of action will be for you.
Having a realtor guide you through the home buying or the listing process takes the burden off your shoulders. As your realtor, Srbuhy will ensure that your real estate experience is stress free – from searching for the right home to escrow. By working with Srbuhy as your realtor, you will receive a free, one on one consultation with real estate attorneys, should there be any legal complexities. You will have a dedicated team of experienced agents supporting your real estate transaction. You also won’t have to worry about all the nuances of a home buying or selling process because Srbuhy will search, investigate and negotiate on your behalf. If you would like to learn more about the real estate process, scroll down to download your free guide to get a better understanding of the buying or selling process.
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