How to Use a Mortgage Calculator to Determine Your Monthly Payments, Interest and More

How to Use a Mortgage Calculator to Determine Your Monthly Payments, Interest and MoreAre you thinking about using a mortgage to buy a new home? Buying your own piece of local real estate is a major financial investment and one that can require some pretty complex math to fully understand.

In this blog post we’ll discuss mortgage calculators and how to use one of these tools to determine your monthly mortgage payments, interest charges, amortization periods and more.

Determining Your Principal and Down Payment Amounts

To get started with a mortgage calculator you’ll need to know how the price of the home and how much you intend to contribute as a down payment. Generally speaking you’ll want to place a down payment of at least 20 percent in order to avoid having to pay for private mortgage insurance and to give you access to better interest rates.

Choosing Your Interest Rate and Amortization Period

Now that you have an idea of the amount of mortgage financing you’ll need, the next step is to choose your interest rate and amortization period. Different lenders will offer different interest rates for every one of their mortgage products, so again you’ll want to play around with these numbers and run the calculation to see which combination of mortgage financing, interest rate and amortization period gives you a monthly payment that suits your budget.

Using a Mortgage Calculator for Refinancing

If you’re thinking about refinancing your current mortgage you can also use a mortgage calculator to help make the math a bit easier. Simply use your outstanding mortgage balance as the principal amount and then choose an amortization schedule that fits your financial goals. Be sure to keep an eye on your interest payments, as you may find that by refinancing to a longer amortization period your monthly payments go down but your total interest paid is quite a bit higher.

Don’t Forget the Closing Costs

Finally, don’t forget that there are numerous “closing costs” – fees, taxes and more – which you’ll need to factor in to your overall calculation. Closing costs will include everything from home appraisal fees to government filing fees and property taxes, and will vary depending on the home and the city or community you’re buying in.

While online mortgage calculators can handle the tricky math to determine monthly payments and interest costs you may still find that you have questions about your mortgage or some aspect of the process. For more information, contact your local mortgage professional and they’ll be happy to share their advice and expertise.

Understanding How Mortgage Calculators Work and When to Make Use of One

Understanding How Mortgage Calculators Work and When to Make Use of OneInvesting in a home is a big financial decision, and along with the decision to buy is the question of how much mortgage you’ll be able to afford. While your debt-to-income ratio can be helpful in determining the range for your mortgage amount, a mortgage calculator can be a beneficial tool in coming to a potential price. If you’re curious about how and if this financial tool can benefit you, here are the details about using a mortgage calculator.

What Does It Do?

It’s very important to ensure that you can afford your mortgage before signing on the dotted line, and a mortgage calculator can assist with this. Most calculators utilize the principal amount of the loan, the interest rate and the amortization period in order to find a monthly payment that is foreseeable for you. While a debt-to-income ratio and the advice of a mortgage professional can be helpful, a calculator can be a quick determination of the overall cost involved.

How Accurate Is It?

Some mortgage calculators can utilize a pretty simple formula to come up with an estimate, but some are more complex and can calculate PMI, home insurance, and even property tax to arrive at a sum. The most accurate calculators will utilize the principal, interest, taxes and home insurance in order to determine an estimate that is feasible for you. However, it’s important to understand that you’ll need to enter the information accurately and leave out as little as possible, as this can have a dramatic impact on the calculation’s reliability.

Should You Use One?

A mortgage calculator can be beneficial in providing you with an estimate, but it should not be the be-all-end-all when it comes to making the final decision. It’s important to consider your current lifestyle and your future plans to ensure that your monthly payment will remain do-able down the road. While a calculator is a good place to begin, it’s worth consulting with a lender to get an idea of how much home you can afford. Since they’ll be required to provide a GFE with the fees disclosed, this will be the best means of understanding the costs.

A mortgage calculator can be a good means of estimating your house-buying ability, but it’s important to get the advice of a lender before making the big decision. If you’re currently in the market for a new home, contact your trusted mortgage professionals for more information.

The Top 5 Mortgage Calculators on the Web and the Pros and Cons of Each

The Top 5 Mortgage Calculators on the Web and the Pros and Cons of EachIf you’re shopping for a great mortgage, you’ll want to use a mortgage calculator. Mortgage calculators keep getting more accurate and more complex, allowing you to explore the various details involved in a mortgage. Try one of these mortgage calculators to learn what you can expect.

ML Calc: A Simple, Straightforward Calculator With Current Rates

ML Calc ( is a simple mortgage calculator powered by mortgage software company Arsidian. And just one click, you can open up a new window that shows you the current mortgage and refinancing rates in your city. However, the user interface is outdated and simplistic, making it difficult to assess data if you’re a visual learner.

The Zillow Calculator: Beautiful Graphics For Visual Learners

Zillow’s intuitive mortgage calculator is fantastic for those who learn best through graphics. Upon inputting your details, Zillow will generate a graphical breakdown of your mortgage payment. You can also view a payment schedule graph that shows you when your loan will be paid off.

The only problem? It doesn’t allow you to compare different mortgages.

Mortgage Professor: A Full-Service Suite of Powerful Calculators

Mortgage Professor is a full suite of 53 unique calculators that investigate everything from refinancing to APR to down payments to mortgage insurance to consolidation. The site can give you data like when your mortgage point payments will break even, whether it’s less expensive to piggyback a second mortgage, and what your best option for a reverse mortgage is.

Mortgage Professor offers a lot of flexibility and options, but the struggle many users face is not knowing where to start – the calculator doesn’t indicate which calculation is the best one to begin with.

BankRate: Get Real-Time Estimates From Actual Lenders

BankRate’s mortgage calculator offers much of the same standard features you’d expect to find, but the one unique feature is its listing of lenders. By inputting details like your mortgage term and amount, your down payment size, and your credit score, you can see real-time quotes from lenders – and immediately contact them.

Bankrate doesn’t include taxes, though, and understanding its specialized symbols can be a challenge given the poor user interface. Location Options And VA Mortgage Options For Military Families’s mortgage calculator is a great tool for those who want a variety of unique options like location-specific home prices and VA benefits. It also uses easy-to-understand visuals, and even shows nearby homes in your price range – plus a variety of articles about mortgages. However, the calculator only allows users to view payment estimates one year at a time.

Finding a mortgage that suits your needs can be a struggle, but a qualified mortgage professional can help. Contact your local, trusted mortgage advisor to get the most accurate information for your unique situation.