If you are planning to purchase a home using a mortgage in the near future, or you want to refinance your existing mortgage, it’s a good idea to access a free online mortgage calculator to estimate your monthly mortgage payment.
Many reputable websites give visitors access to free mortgage calculators that are not only simple to use, but also that provide very useful information. Unless you want to do the math by hand, mortgage calculators are quick, automated, and efficient – and are great at providing you with a fairly accurate estimate – assuming you are certain that the numbers you plug in are as precise as possible.
First and foremost, it’s important to understand that mortgage payments usually include more than principal and interest. Most mortgage companies collect and allocate a certain amount from each mortgage payment to escrow – which is used to pay your property taxes and your homeowner’s insurance premiums. (Note: some homeowners elect to pay their taxes and homeowner’s insurance directly and not through their mortgage).
Depending on the specific mortgage calculator you use, the program will ask you to enter information such as:
- Value of the home
- Your credit profile (e.g. poor, fair, good, excellent)
- The loan amount
- The purpose of the loan (e.g. new home purchase or a refinance)
- The loan’s interest rate
- The loan term (e.g. 15 years or 30 years)
- The loan’s start date
- The property tax amount
- PMI (e.g. the extra amount you will have to pay for private mortgage insurance if you don’t have a 20 percent down payment).
After you enter all of the numbers, the mortgage calculator will provide you with information such as:
- Your monthly payment
- How many payments you will have to make in order to pay off the loan
- The total interest you will have to pay on the loan
- Your pay-off date (e.g. the date in which your mortgage will be paid in full)
There are several types of mortgage calculators, and each offers slightly different calculations. For example, some allow you to compare the potential monthly payment on different loan types and others provide you with an amortization schedule. For more information on how to find the best possible free online mortgage calculator, or for advice on how to use this type of automated tool, call The Home Loan Arranger today at: 1-877-938-7501.