Mortgage Implodometer

Are you worried about repaying your mortgage? Use a mortgage calculator to see if you are in danger.

Looking to buying a new home can be very stressful, expensive and time consuming. The first thing you would want to know is how much this decision is going to cost you and how much of it you can afford. This is when you will need the help of a mortgage calculator.

With a mortgage calculator you can figure out how much your entire payment will be, don’t be surprised to see that you will be paying much more than what is printed on that sticker. Unless you have enough cash to pay it all up in one go. The calculation to the final price should include the principle amount, interest, insurance and taxes. The last three are costs you will have to incur when taking a mortgage loan.

Mortgage Calculator Variables

You need to enter this data in to your mortgage calculator for it to come up with the amount you will be paying at the end.

The Principle. This is the amount you are looking to borrow to purchase your home.

Interest, is how much the bank will charge as fees for lending you the money. You need to enter the current interest rate in to the mortgage calculator. However, if you have defaulted on your past loans or have missed any payments the bank may charge you an interest rate hire than the current market rate.

Insurance. This is the homeowners insurance the bank requires you to have to protect itself if for some reason you are unable to repay the loan.

Property Tax. This is what the government will charge you when you buy a home.

An escrow company normally handles taxes and insurance, so that the whole amount can be paid through a single payment.

Mortgage Loan Options

You have a few options to make the load fit your budget. You can choose from a 5 to 30 year period to repay your loan. The shorter the repayment period higher the monthly instalment will be. But at the same time with a short repayment period you will be paying less as interest. With a loan, spanning over 30 years your monthly instalment will be very much lesser and more manageable. There is also a third option where you have to pay only the interest and pay the principle as a lump sum at the end. With the last option the monthly payment may look small but you will have other costs that aren’t added in such as insurance and Property taxes.

A Mortgage Calculator That Fits Your Requirement

Some online mortgage calculators have graphical illustrations showing exactly how your mortgage is doing. These mortgage calculators will graph out the principle, interest and escrow to how your mortgage acts over time. This will give you a clear picture on how everything works.

With a plethora of online mortgage calculators available what you should be looking for is a mortgage calculator that best suite your requirement. A mortgage calculator that figures in escrow with the insurance and taxes added would get you the true cost of the home you are looking to purchase.

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