Handy Mortgage Calculator
Thinking of buying a new home and need to calculate your conventional loan mortgage payments?
Please use this handy online mortgage calculator as a guide. The last item on the list is labeled “HOA” which stands for Home Owners Association fees. This is mostly used in the United States, but you can also use it to add any condo-fees or other monthly expenses.
Please remember that home ownership does come with a variety of expenses, such as those listed in this article.
Please remember that the mortgage interest rate you will receive depends not only on the mortgage lender, but on your credit score as well. With a better score, you will qualify for a lower rate, whereas a lower credit score would mean a higher monthly payment.
How To Use Your Mortgage Calculator
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Home Value: This is the selling price of the home you are intending on purchasing.
Down Payment Amount: This is how much money you have for your down payment.
Loan Amount: This is simply calculated by subtracting your down payment from the purchase price of your home.
Interest Rate: This is the annual percentage rate you will pay. You will have to make a choice between a fixed-rate and an adjustable-rate mortgage. Check your local papers for current mortgage rates.
Loan Term: This is the length of time of the home loan. In Canada, this is most commonly 25 yrs, while in the US a 30-year mortgage is common. You CAN opt for a shorter-term loan, such as a 15-year mortgage, if you wish to pay your home off sooner. Keep in mind that, even if you ‘lock in a fixed rate’, it will most likely be only for a few years.
Property Tax: This is where you enter your annual property taxes.
PMI = Property Mortgage Insurance: Sometimes referred to a ‘private mortgage insurance’ this is required ONLY if you put less than 20% down. This becomes part of your monthly mortgage payment. Check with your mortgage professional for any local regulations in this matter.
Homeowner’s Insurance: If you get a mortgage from a lender, that lender will insist on you obtaining homeowners insurance, (fire and flood insurance) for the life of the loan.
Monthly HOA: This is homeowners association fees (hoa fees) Most common in the US, although some Canadian neighbourhoods now have this added fee as well. If you’re buying a condo, this is a great place to enter your monthly condo-fees.
After you’ve entered all these figures, the tool will calculate your monthly house payment, and even give you the total interest you can expect to pay over the life of your loan.
Keep in mind that you can reduce these amounts by making extra payments, so long as your specific loan type allows for this.
Mortgage Pre-Approval: Its more than just a good idea to be pre-approved BEFORE you start your joined to a home purchase. Meeting with a qualified professional, and going over various scenarios and loan options will help you decide whether to het a longer term or shorter term mortgage.
You will need to produce pay stubs and bank statements to show your gross monthly income. Special calculations and products exist for self employed home buyers as well.
Having these answers will help you determine how much house you qualify for. You’ll also better understand the differences between fixed-rate mortgages and an open rate mortgage loan.
If you would like a referral to a mortgage professional, a home insurance specialist, lawyer, home inspector, moving company or financial advisor, please call me first. Over my 18 yrs as a real estate agent, I have established a network of trusted professionals who can help you every step of the way.