Mortgage payment calculators are a wonderful tool that provides an estimate of what you can expect to pay when you’re on the hunt for a new home and home loan.
It’s helpful to understand certain details such as what makes up a monthly mortgage payment and why you should use a mortgage payment calculator.
We’re here to help explain the mortgage payment calculator benefits so that you have an accurate picture of your finances and what you can afford.
That way you’ll feel prepared to meet with a lender to discuss the right mortgage solution for you!Check your mortgage options
What does a mortgage calculator do?
A mortgage payment calculator determines what your expected monthly payment for a home would be given the variable details you include.
The calculator will estimate such items as:
- Principal and interest
- Tax and insurance
- PMI (Premium Mortgage Insurance)
These outputs are all influenced by other factors, such as the current market, your credit score, income, and debt.
It’s common among home buyers to not be fully aware of how much you may have to pay on your monthly mortgage payments—it’s pretty complex to determine.
A mortgage calculator is a great tool because it allows home buyers to gain insight into their financials and what they can expect, as a great jumping off point for conversation with a lender.
Why should you use a mortgage calculator?
Purchasing a home can be exciting, but considering that it is also a rather large purchase—do your due diligence and research before you begin the home-buying process.
A mortgage payment calculator is a great way to start your research and is highly encouraged for any home buyer looking for direction as they determine their financial situation and budget.
What you think you can afford may vary since interest rates and fees are different with each lender. Thus, once you have your estimate, you should consider speaking with a lending professional such as a GO Mortgage advisor, so they can review your scenario and provide a more accurate analysis of your monthly payments.
Now let’s get into a bit more detail about the benefits of using a mortgage calculator.Get started with GO Mortgage
1. Determine how much home you can afford
One of the most basic, but important benefits of a mortgage payment calculator is to find out how much you can reasonably spend on your new home.
In some cases, a buyer will start looking at homes and they may have their heart set on something out of their price range.
If you start the process with a mortgage payment calculator, then you’ll know your exact price range and can move forward in confidence.
2. Know what to expect for a down payment
It’s pretty standard that the more you can put down on your home purchase for a down payment, the better. However, this isn’t the case for everyone.
Another benefit of a mortgage payment calculator is that you can adjust the percentage rate for your down payment to get an idea of the payment amount that would be beneficial for you.
3. Helps you create a budget
When you’re applying for a home mortgage, one part of the process is negotiating your loan terms. If you use a mortgage payment calculator beforehand, then you’ll be saving yourself money by having an idea of the terms that are most suitable for you.
Again, what you can afford may vary by what you’re offered. It’s beneficial to know what terms work for you so that you aren’t hindering your finances.
4. Save time
Another great benefit of a mortgage payment calculator is that you save a substantial amount of time. If you know your starting point then you can meet with a lender sooner, which ultimately gets you in your home quicker.
These calculators give you a rough idea of what to financially expect so you can limit your home search to what is in your range and know which loans you could be eligible for, so there is no back-and-forth with a lender.
5. Compare variables
When using a mortgage payment calculator, you can adjust the loan term (length), down-payment percentage and interest rate percentage.
In doing so, you’re able to play around and see what would be most practical for you.
Maybe you plan on staying in the new home for a while and are interested in a longer loan term. In this case, you might save money by taking out a mortgage for a longer term.
What does your loan term mean?
What is a loan term and what does this mean for you? Your loan term is the length of time you have to pay back what you’ve borrowed for your home.
The term length you chose will also influence your monthly principal and interest payment, along with how much interest you’ll pay over the life of your loan.
Shorter terms may save you money in the long-run, however, you can expect higher monthly payments. Longer terms will have smaller monthly payments, but you may have to pay more in interest.
However, it’s not so black-and-white, which is why it’s beneficial to use a mortgage payment calculator and speak with a professional mortgage loan officer.
A calculator can help get you started, and a mortgage officer can help you navigate finding the right loan for you.
How to get started with GO Mortgage
Whether you’re still browsing or ready to take the next step, make sure you take advantage of our mortgage payment calculator and its benefits.
If you’d like to speak with someone to explore buying, building, refinancing or renovating, then connect with GO Mortgage today.
We’ll support you from start to finish and find the most affordable loan product for you.
Call us today at 800-444-RATE.