Introduction of Mortgage Calculator

A Mortgage Calculator is commonly used real estate tools for the home shoppers. The calculator helps you find the best deal for yourself with the estimated cost, it also gives you a partial idea about the house and whether you can or not afford the house. In order to have a good idea and to get prepared in advance, every home shopper should use online number cruncher.

Contrasting means of using a Mortgage calculator

1.) Choose the Type of Loan : The type of loan you choose to invest for your new home will precisely affect your monthly mortgage payment. Eventually, the payment will change to incorporate the term for the chosen loan and its average rate of interest. The calculation will help you decide the type of loan to pay the monthly mortgage.

Types of Loan

  • 5/1 Adjustable Rate Mortgage: Although the interest rate keeps on fluctuating but it is lower than the fixed-rate loan. Once the fixed period completes its duration, the monthly payment increases changing the ARM mortgage rate in the result. Before opting for ARM loan make sure you are well aware of the incremented payment.

  • 15-year Fixed: Although the home loaner opting for a 15-year fixed mortgage will have a higher payment amount but the lower interest rate will make them pay off their bill faster. 

  • 30-year fixed: The most commonly opted loan, 30-year fixed is eventually the lowest paying loan but has the highest interest rate.

2.) Principles of monthly mortgage payment: The monthly mortgage payments circulated to various roots. You can get all the details once you use the calculator. Make sure you check 'Include Taxes/Ins' box.

Therefore, following details will appear on your screen.

  • Private Mortgage Insurance: If your down payment is less than 20% of the purchasing price, PMI will be applied. In order to remove it, you can advance the mortgage calculator option.

  • Taxes: It displays the property taxes based on the location and value of your house. You can opt for the remove taxes, adjust them or advance option.

  • P&I: Principle and Interest represent the section of the monthly payment you do for your home loan.

  • Insurance: Th e approximated cost of your house's insurance on the basis of monthly payment.

3.) Calculate the total amount due for payment: The mortgage calculator gives you all the details of the interest you will be paying, it also displays the lifetime interest payment of your loan. The schedule tab on the mortgage calculator page will give you a graph displaying the interest and principles paid.

4.) Distinct Interest Rates and its Effects: In order to know how interest rates effects monthly mortgage payment, enter different interest rates on the mortgage calculator. The number cruncher accordingly includes the average rate for the loan program. It also displays the varying higher and lower interest rates.

5.) Deciding the price for your new home
A mortgage calculator can be used as a tool to decide the price that may fit into your monthly budget. You can also add an escalation clause in order to know the details of your monthly mortgage payment.