How To Use A Mortgage Calculator

When deciding whether to rent, buy, re-finance or stay put, a mortgage calculator is an invaluable tool. With it, you can calculate the cost of borrowing money at different interest rates over different periods of time; this knowledge allows you to make wise and strategic decisions when it comes time to choose a mortgage.

The basic components of a mortgage calculator

A great mortgage calculator that is available for free online is www.mortgagecalculator.org. When you use this tool you can input all the numbers that you know or predict for your home purchase, and the calculator then gives the monthly payment, tax and mortgage insurance, total amount of interest over the course of your loan, total tax for the entire loan and the loan payoff date.

Enter your information

First, enter the estimated value of the home. This is the price you expect to pay. If the home is listed for a certain amount but you feel that it could sell for a somewhat lower amount, enter this figure. To determine the actual loan amount, subtract the amount you plan to put as a down payment from the home value figure. If you do not yet have a quote from a lender for an interest rate, leave it at the one given by www.mortgagecalculator.org, which is based on current prevailing rates. Finally, press calculate to see your expected monthly payment to the right.

Play around

The beauty of a mortgage calculator is that you can use it to explore all sorts of hypothetical situations. Just what does it cost to live in that dream home you found, if you had great credit and a 20% down payment? Now you can know, and decide if that is a reasonable goal to pursue. Maybe you want to know what the payment and interest difference is on a fifteen year mortgage as opposed to a thirty - just change the values and see!

A mortgage calculator is a perfect way to get a feel for all of your options when shopping for a mortgage. Make sure to use it thoroughly before making any important home-buying decision.

You can use it to explore all sorts of hypothetical situations