How to Use a Mortgage Calculator to Estimate Your Monthly Payment?

Answer 1

If you are house shopping, you may be wondering how much you will be paying in monthly mortgage payments. You can find estimated monthly through online mortgage calculators. There are many sites with mortgage calculators that can be found through a simple internet search.

To start the process, you will need to gather some information. First, determine what you principle will be. The principle is the total purchase price for the house minus any down payment. The second thing you will need is the number of years the loan is amortized over. 30-year mortgages amortization are common, but your loan may be a longer or shorter period. Finally, you will need the interest rate of your loan. If you don’t know your loan rate yet, you can estimate it by searching for current mortgage rates.

Now you are ready to plug your information into a simple mortgage calculator. When you press Submit or calculate, the calculator will give you an estimated monthly payment. Some calculators may also show an amortization schedule which shows you how much of each payment goes to interest over time.

Once you have a starting point, try seeing how alterations in your initial numbers will affect your monthly payment. If you decrease the principle, how much will the amount decrease? What if you increase or decrease the interest rate? Some of these small changes can have a big impact on your monthly bill.

Remember that your monthly payment may also include PMI or private mortgage insurance and escrow payments for tax or homeowners insurance. Some calculators may allow you to enter a PMI or tax rate to include in your monthly amount. Because there is so much variation in what information mortgage calculators can use and produce, you may want to try several calculators to get the best information available. It is also important to remember that the numbers you get from a mortgage calculator are only as good as the information that you put in and if any of the information you input is incorrect, your final numbers will also be inaccurate.