Mortgage Calculator2019-02-03T22:21:11+00:00

So you’ve decided to stop paying rent and purchase your home. That’s great news!

It’s time to stop paying your landlord’s mortgage with your hard earned dollars. You’ve looked at houses with your agent and narrowed it down to one that fits your needs. Now it’s time to see if you can afford it. Is the price tag is something you can work with and comfortably afford each month? This complimentary mortgage calculator will help you narrow down the numbers before you have your agent write an offer.

So you’ve decided to stop paying rent and purchase your home. That’s great news!

It’s time to stop paying your landlord’s mortgage with your hard earned dollars. You’ve looked at houses with your agent and narrowed it down to one that fits your needs. Now it’s time to see if you can afford it. Is the price tag is something you can work with and comfortably afford each month? This complimentary mortgage calculator will help you narrow down the numbers before you have your agent write an offer. A prepared buyer would go into the home-buying process prepared.

Buyers often ask, “how much house can I afford to buy?” And, “should I wait a little while before submitting an offer?”  To help answer these questions, we need to spotlight interest rates and determine their significant impact. An increase of even just one percentage can drastically change your mortgage payment. It’s quite shocking really.

Try the mortgage calculator for yourself. Enter a moderate 2% increase in the interest rate for the house you are thinking of buying to ascertain the difference in monthly mortgage expenses incurred.

Let’s do an example together.

In interest of time, let’s use this simple scenario to depict a purchase. Let’s use a sales price of a home is $300,000 excluding taxes and insurance.  Let’s also base it on a 30-year mortgage with a 4.5% interest rate. The monthly mortgage obligation is approximately $1,520 each month.

Thinking maybe you should wait awhile after seeing your numbers? Maybe you’re thinking you should wait and save up some extra money for a larger down payment. That still may not be the best move. While you are waiting, the market will not and interest rates will keep inching up. Even a slight increase can have a big impact on your wallet.

Now, let’s do another calculation. Use the same home sales price as before of $300,000 and base it on a 30-year mortgage again. But time has gone by and interest rates have increased slightly to 6.5%, only a  two percent hike. This equates to a much larger monthly mortgage payment of $1,896. That’s a whopping $376 a month additional cost!

What now?

An important take away from this lesson is DON’T WAIT! Rates are going up, not down. Back in the eighties you may remember or heard that rates were exorbitant high. Unfortunately for the U.S., the situation at that time was all too real. Rates were averaging 16% – 18%! It is unfathomable now for anyone to be expected to pay $4,277 per month 30 years ago for the same $300K house.

In spite of the gargantuan interest rates, back then people were still buying homes. It was still considered a much better investment than renting from a landlord.

Consider yourself fortunate that interest plunged to an all-time low in recent years. The rates have stayed at remarkably low levels for the past few years, but they have definitely started to show movement upward. Take advantage of the opportunity to buy now before the pendulum goes too far. The obvious benefits are clear – you would be getting much more house for your money, plain and simple.

Now, we’re back to the present day.

How do you figure out what your mortgage payment might look like after you’ve zoomed in on your future home? People do not generally carry around in their pockets mathematical formulas for just such an occasion. That includes your real estate agent who is not a professional lender or mathematician. The good news is that there is an uncomplicated way to get an answer by using a mortgage calculator. Plug in the information when using the mortgage calculator and the approximate monthly mortgage payment will be determined for you.

You need to know is the purchase (sale) price and how much are you applying towards a down payment? Once the down payment is factored in, you then have a number to work with. Add in any additional expenditures such as homeowner’s insurance (approximately 1%) and closing costs (approximately 3%) that needs to be borrowed. Then apply the current interest rate. (This will not be exact number since it continually fluctuates. Then consider in the principal (approximately 1.2%). All of these numbers combined results in new figure which is the loan amount you are requesting your lender to approve.

Conclusion

Sound complicated? Exactly, even with the help of coffee!  The problem-solving formula may not be that enticing for you to work out. To save confusion and headache, use the mortgage calculator below. Just remember to add yearly taxes and home insurance costs (total of both divided into 12 months). Go ahead – put it to work. You will be glad you did.

Enter Your Mortgage Loan Amount Below

You may adjust fields to see what your home might cost based on different interest rates. 

Calculations don’t include your tax and insurance payments.

Edit Home Price and your interest rate to calculate your house payment


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