A mortgage calculator is a tool that potential home buyers can use to answer important questions. Determine how much money you can afford to spend on a house as well as how much you will spend each month on a home mortgage. Existing homeowners can use a mortgage calculator to find out if a refinance will work to lower monthly payments. However, it is important to note that not all mortgage calculator results will be accurate.
Consumers must learn what traps to avoid in order to make the right decision on a new home purchase or refinance. If you are making decisions on a refinance or home purchase, read on to find out what traps to avoid to stay financially secure.
The Mortgage Payment
With a mortgage payment, you typically have five different expenses. The principal payment, the interest payment, insurance, real estate taxes and private mortgage insurance may also be included. You want to be sure that you use a calculator that will evaluate all of these factors so you know the true mortgage payment for a loan. This way, you are not surprised by added payments in your monthly mortgage.
Fees from HOA
Depending on where you are purchasing a home, you may end up with HOA fees. Homeowners’ Association Fees are a payment you must make each month in order to live in a certain area and have access to particular amenities. When you are making a decision to purchase a home, be sure to find out how much, if any, HOA fees are included. This will be an added payment you have to make each month for your home. Sometimes, HOA fees can be quite high and you want to be sure you can afford what you owe, for your mortgage as well as fees.
The interest rate of a home mortgage will be the determining factor as to how much you will pay each month on your loan based on the purchase price. The interest rate you are given will be determined by the down payment you provide, your credit score, the cost of the home, location of the home, income, debts and the type of mortgage you qualify for. You may find that a calculator gives you a basic rate while you may qualify for a rate that is higher or lower, which will affect the monthly mortgage payment.
When you own your home, you may have the ability to deduct mortgage interest, if you itemize your deductions. The deduction can essentially lower the effective interest rate of your mortgage. Many calculators do not configure taxes.
When you close on a home mortgage, you will most likely owe closing costs of some amount. The cost will vary based on your particular mortgage deal. Where you are located, the type of loan, down payment and more factors determine just how much is owed in closing costs. Calculators may not be able to determine this information for you which can affect the amount of your payment.
To learn an accurate price point for a new mortgage or refinance, contact Mortgage Guys. Our lenders can assist you with quality info to help you make an informed decision for a mortgage loan.