Determining The Right Mortgage Payment Using A Mortgage Calculator

By Author: Matthew Kennedy
Total Articles: 8
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To help determine the right payment for a mortgage loan that's right for your particular financial situation, you can take advantage of online mortgage calculators like those on Sail Mortgage and other sites with similar calculator functions. After entering the appropriate data, you will receive answers to your mortgage payment questions in seconds.For example, you can find a mortgage calculator to do the following:*Help you decide whether or not to refinance*Determine how much payment you would have to make on a mortgage*Assist in helping you decide whether it makes more sense to rent or buy*Help you decide on how much home loan you can afford*Help you assess how much you can prudently borrowAs with any other calculator, the accuracy of what you enter into it will determine the authenticity of what comes out. The following are some of the pieces of information you will need to obtain answers to your scenarios:Total cost of the home: Have an estimated figure on what the overall cost of the home will be.Down payment: Know how much cash you will be putting down.Term: You will also need to know the length of your loan. This can ...
... be anywhere from 5 to 40 years.Debt: You will need to know your current monthly other-than-mortgage payments. This will include car notes, student loans, credit cards, etc. Normally, lenders do not want your total debt including housing to exceed 35% (it may even be lower) of your gross monthly income.PITI (principal, interest, taxes and insurance):Principal: This is the true amount of the mortgage. It is the amount of the loan you will be paying off.Interest: This is whatever the quoted interest rate is on the loan.Taxes: This refers to the property taxes homeowners must pay. You can pay it separately (they are usually split into two payments per year) or you can have it automatically taken from your payments to the mortgage holder. The mortgage holder is then responsible for making the bi-yearly county property tax payment.Insurance: This means two types of insurance:Home insurance- This is required insurance to protect your home from liability lawsuits, bodily injury and damage that occurs on the property.PMI (Private Mortgage Insurance) - If you make a down payment of less than 20%, you will have to buy this insurance. This insures the mortgage lender against the possibility of your defaulting on the loan. It usually has to be carried until there is 20% equity in the home. Then you can request the requirement to be removed.You now have enough information to play out some interesting scenarios. For example, if you wanted to see if your income was enough to qualify for a loan, this is what you might enter:Desired mortgage: $100,000Length of loan: 30 yearsInterest rate: 5%Property taxes: $2,000Total monthly non-mortgage debt: $300After this information is entered in the calculator, hit submit. These are the factors it calculated for:Monthly principal and interest: $536.82Total monthly housing payment (This includes property taxes and insurance.): $1,003.49Required salary: $34,405As you can see, a mortgage calculator properly used can be a critical tool in your search for the right mortgage or refinance product for you. To learn more, visit your local mortgage lender's website and search for a customized mortgage calculator tool.