Using a Mortgage Calculator to Estimate Your Monthly Payment
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If you are looking for a new home, you need to know how much money you will have to pay per month. This is incredibly important for figuring out your monthly budget. One of the tools that can help you do exactly that is called a mortgage calculator. A good mortgage calculator will help you determine the right home for your needs. When it comes to a good mortgage calculator, there are a few features to look for.
The Forgotten Homeownership Costs
The essential features that any mortgage calculator should be able to handle include:
- The overall price of the home
- The interest rate attached to any home loan
- The down payment
As people put more money down, the monthly mortgage payment should drop because the loan is smaller. On the other hand, these are not the only costs that go along with monthly payments. Some of the other monthly payments that homeowners need to consider include:
- The monthly home insurance payment
- The property tax rate
- The presence of any homeowner association (HOA) dues
While mortgage lenders often hold these items in escrow for the borrower, they still factor into the total cost of the home. Find a mortgage calculator that includes these hidden costs.
The Ability to Break Out a Monthly Payment
Another important feature that people should look for in a mortgage calculator is the ability to break out the monthly payment. As a homeowner, some of the payment is going to go toward the principal of the loan each month. Eventually, the principal should drop to zero.
It is still a good idea to see where the rest of the money is going. This includes what percentage of the payment is going toward HOA dues, home insurance, and property tax. This feature is important to know where the money is going. Find the right mix of house and loan rate using this feature.
Change the Monthly Debt Payments
Many mortgage calculators determine the monthly payment; however, other options for mortgage calculators will provide additional information as well. Instead of juggling interest rates and down payments, it is also important to work this process in reverse, starting with the debt-to-income ratio.
This is important because most lenders will look at this ratio when deciding if someone is worthy of a home loan. This mortgage calculator considers someone’s other debts such as credit cards, student loans, and car loans. Then, by wiping out these loans before applying for a mortgage, it shows people how much larger of a house they can afford. This is a great feature that people should consider.
Check the Payoff Progress
Finally, another important feature is the ability to watch the principal and interest of the loan payments change over time. This provides homeowners with the ability to watch as the interest on the mortgage drops and the percentage of the payment is going toward the principal increases. This can be great for homeowners to visualize where their money is going each month.
Contact Mortgage Investors Group Today
If you are looking for a professional to help you with the home loan process, contact Mortgage Investors Group today!
