Home Purchase Amortization Calculator
Your monthly payment will depend on a whole host of factors. Get a feel for what you can afford.
Mastering Mortgage Calculations with Total Mortgage's Mortgage Calculator
Introduction
Are you gearing up to delve into the world of homeownership? Congratulations on taking this significant step towards securing your future! But before you embark on this exciting journey, it's essential to equip yourself with the tools and knowledge needed to navigate the complexities of mortgage calculations. Total Mortgage's Mortgage Calculator is your go-to resource for easily estimating your mortgage payments and understanding the financial intricacies involved.
How to Utilize Total Mortgage's Mortgage Calculator
Calculating your mortgage payments shouldn't be a daunting task. With Total Mortgage's user-friendly Mortgage Calculator, it's a breeze. Here's a step-by-step guide to using our calculator effectively:
Enter Your Home Details: Start by inputting essential information such as the home price and your down payment amount. Whether you're purchasing a new home or refinancing your current one, our calculator accommodates your needs.
Specify Your Loan Details: Tailor your calculation by entering details like the loan term and interest rate. Whether you're opting for a standard 30-year loan or exploring shorter terms, our calculator provides you with instant insights into your monthly payments.
Factor in Additional Costs: Total Mortgage's calculator goes the extra mile by estimating additional expenses such as property taxes, homeowners insurance, HOA fees, and mortgage insurance. By accounting for these costs upfront, you can make informed decisions about your budget and financial future.
Explore Amortization Options: Delve into the extra payments tab to explore the impact of additional payments on your mortgage. Whether you're considering prepaying your mortgage or adjusting your payment schedule, our calculator empowers you to visualize the long-term effects on your loan.
If you're contemplating accelerating your mortgage payoff or adjusting your payment frequency, discover savings with Bi-Weekly payments: Dive into our calculator's features to uncover the potential savings of switching to a bi-weekly payment schedule.
Uncover Your Home Affordability: With our calculator, easily figure out how much home you can afford by inputting your income and monthly debts. Get a clear understanding of your budget for purchasing a house, and make informed financial decisions.
Understanding the Components of Your Mortgage Payment
A mortgage payment consists of several components beyond just principal and interest. Total Mortgage's Mortgage Calculator sheds light on these elements, allowing you to gain a comprehensive understanding of your financial obligations. Here's a breakdown of typical costs included in a mortgage payment:
| Principal | The amount borrowed from the lender. |
| Interest | The cost of borrowing money, expressed as an annual percentage rate. |
| Property Taxes | Annual taxes assessed by local authorities on your property's value. |
| Homeowners Insurance | Insurance coverage protecting your home against various hazards. |
| Mortgage Insurance | Premiums paid to protect lenders against borrower default. |
Ways to Decrease Your Monthly Mortgage Payment
If the monthly payment projected by our calculator seems daunting, consider implementing these strategies to alleviate the burden:
- Opt for an Extended Loan Term: Extending the repayment period reduces your monthly payment, albeit at the expense of paying more interest over the loan's duration.
- Downsize Your Home Budget: Choosing a less expensive property results in a smaller monthly mortgage obligation.
- Seek Lower Interest Rates: While pursuing lower interest rates can diminish your monthly payment, keep in mind that some exceptionally low rates may necessitate paying points, an initial expense.
- Increase Your Down Payment: Contributing a larger down payment upfront decreases the loan amount, thereby reducing your monthly payment obligation.
Mortgage Payment Formula
For those interested in the details, here's a formula to assist in manually calculating mortgage payments:
| Symbol | Description | |
|---|---|---|
| M | Total monthly mortgage payment | |
| P | Principal loan amount | |
| r | Monthly interest rate. Lenders typically provide an annual rate, so divide that figure by 12 (the number of months in a year) to obtain the monthly rate. For instance, if your interest rate is 5 percent, your monthly rate would be 0.004167 (0.05/12=0.004167). | |
| n | Number of payments over the loan’s lifespan. Multiply the number of years in your loan term by 12 (the number of months in a year) to determine the total payments for your loan. For instance, a 30-year fixed mortgage would require 360 payments (30x12=360). | |
This formula aids in analyzing figures to ascertain your affordable housing range. Alternatively, you can utilize our mortgage calculator to gauge your financial boundaries.
Determining Your Home Buying Budget
Not sure how much of your income to allocate to housing costs? With our calculator, you can effortlessly estimate your purchase budget based on your income, monthly debts, interest rate, and down payment amount
This allows you to translate a monthly payment amount that suits your fincancial situation, into a more concrete budget number which lets you know just how much home you can afford. By adjusting the parameters to your situation you can make an informed financial decision and be more prepared to make an offer on your dream home.
Mortgage Calculator: Alternative Uses
Most people use a mortgage calculator to estimate the payment on a new mortgage, but it can be used for other purposes, too.
Here are some other uses:
Planning to pay off your mortgage early?
Use the "Extra payments" functionality of our mortgage calculator to find out how you can shorten your term and save more over the long-run by paying extra money toward your loan's principal. You can make these extra payments bi-weekly, monthly, annually or even just one time.
To calculate the savings, click the "extra payments" button and enter your loan details, and the type and amount of your additional payments. The calculator will then show you your savings in terms of both money and time.
Decide if an ARM is worth the risk.
The lower initial interest rate of an adjustable-rate mortgage, or ARM, can be tempting. While an ARM may be appropriate for some borrowers, others may find that the lower initial interest rate won't cut their monthly payments as much as they think. To get an idea of how much you'll really save initially, try entering the ARM interest rate into the mortgage calculator, leaving the term as 30 years. Then, compare those payments to the payments you get when you enter the rate for a conventional 30-year fixed mortgage. Doing so may confirm your initial hopes about the benefits of an ARM -- or give you a reality check about whether the potential plusses of an ARM really outweigh the risks.
Find out when to get rid of private mortgage insurance.
You can use the mortgage calculator to determine when you'll have 20 percent equity in your home. That's the magic number for requesting that a lender waive its private mortgage insurance requirement. If you put less than 20 percent down when you purchased the home, you'll need to pay an extra fee every month on top of your regular mortgage payment to offset the lender's risk. Once you have 20 percent equity, that fee goes away, which means more money in your pocket. Simply enter in the original amount of your mortgage and the date you closed, and click "Show Amortization Schedule." Then, multiply your original mortgage amount by 0.8 and match the result to the closest number on the far-right column of the amortization table to find out when you'll reach 20 percent equity.
