How to Figure Out Mortgage Payments Using a Mortgage Calculator

When looking at the cost of buying a house, the overall price may not be as important to you as the monthly mortgage costs. To estimate how much your monthly payment would be you can use a Mortgage Calculator.

You should visit your bank or other lender to find out exactly how much your payments would be but a Mortgage Calculator will give you a rough estimate.

Difficulty: Moderately Easy

Instructions

Things You'll Need:

• Free Mortgage Calculator

1. Locate a free mortgage calculator. There are many websites that offer the use of an online Mortgage Calculator to get you to visit their site. Usually these sites are in the business of Real Estate or Mortgages or some other financial business. If you Google "Free Mortgage Calculator" you'll find many to choose from. Ditech has a good Mortgage Calculator on their website.

2. Enter the interest rate you believe your lender will charge you. If you aren't sure what the interest rate for mortgages is running right now, look on your bank's website. They will have it posted somewhere.

3. Enter the loan amount. Usually you will pay a down payment of 5% or more and often you will offer a price that's lower than the asking price for a property. The amount you enter into the "Loan Amount" line is the amount you will need to borrow from the Lender after the down payment is deducted from the price you negotiate.
   
   For instance, if a seller was asking $250,000 but you offered $225,000 and the seller accepted, the selling price of the house would be $225,000. You would then deduct the down payment from that amount. Let's say you pay 10% of the selling price, or $22,500 for a down payment. That would leave you with a loan amount needed of $202,500.

4. Enter the term of the loan. Some Mortgage Calculators ask for the term to be in months and some in years. A 30 year loan is typical for a primary dwelling. 30 years is 360 months.

5. Most Mortgage Calculators needs only this information. Some also ask for the cost of Homeowner's insurance and taxes.

6. The final amount is an estimate of what your monthly mortgage payment would be. Confirm this amount with your lender.

7. Using a Mortgage Calculator may be a more realistic way of determining how much house you can afford.

[goodselfme]

on 3/3/2009 Great info especially in difficult financial times when every amount counts.