What You Need To Know About Mortgage Calculator


A precise mortgage calculation is essential for any family financial planning. Fortunately, there are plenty of online tools that can help you calculate the exact amount of mortgage you are facing. For instance, this website takes into account several factors in order to give you the exact amount of monthly principal and interest payment you will be paying each month.

The components used to determine the mortgage payments are standard. House price is the first and the most important one. Next, you need to input your down payment, which will also determine whether you need PMI (Private Mortage Insurance), which protects the bank in case you default on your loan. If your down payment is less than 20% of the house value, you will need to get PMI as well. The duration of the mortgage is also required, as well as interest rates. Property taxes and home insurance also play a part in the calculation. Finally, you need to input HOA (Home Owners Association) fees, if your new neighborhood has one.

House Price


This is the price you are going to pay for your new house. You can also input other values, just to make sure how high you can go and still be able to afford to pay a mortgage.

Interest Rate

rent average interest rate is 4.14%, but that will vary depending on the terms your bank offers you, as well as your own credit rating. Many people don’t realize that Interest rates can be negotiable and you should try to get a lower one, or at least shop around for the best offer.

Private Mortage Insurance (PMI)

If your down payment exceeds 20% of the house value, you don’t have to worry about PMI. If it is less, then you need to get one. This insurance covers the bank, in case you skip on your mortgage. The important thing to know about the PMI is that you can pay it upfront or it can be added to your loan. If you choose the later, you will also pay interest on it, just like you do with the principal loan.

Property taxes


Some private lenders like PaydayAvailable don’t include property taxes in their loans, but all FHA (Federal Housing Administration) insured mortgages must contain them. The bank will calculate your property taxes for the duration of the mortgage and place that money in escrow, paying them as they are due. This can be handy, as it is one less thing to worry about, but it does add a sizeable chunk to your monthly payments.

Home Insurance


Banks will usually require proof of home insurance before they agree to lend you any money for house purchase. You can get one yourself, or you can make it a part of the loan. It functions the same way as property taxes, bank places the money in escrow and make payments on your behalf to the insurance company.

With all the major terms clarified, you are now ready to use a mortgage calculator and find out the exact amount of money you will be paying each month for your new house.