Mortgage Calculators

If you’ve gone to any real estate website looking for a home to purchase, you might have noticed a link that allows to “calculate your payments”.  How do these work?  Should I trust these calculators?  Ultimately, no matter how detailed the calculator is, they only provide you with ESTIMATES!   There are many different calculators out there; Private Mortgage Insurance calculators, Property Tax calculator, and Extra Payment calculator.

Private Mortgage Insurance calculator:  A good mortgage calculator will include a Private Mortgage Insurance calculation for down payments less than 20%.  More often than not, these are not they type associated with real estate offices, most of those are simple estating tools for principle and interest only.

Property Tax calculator:  An even better calculator will also ask you about property taxes for your property from the previous year.  Often provided with information on the house.  However, the best way is to simply ask the municipality that governs what the current tax rate is for the property.  An easy approximation is $2,000 for a $200,000 home…which estimates at and extra $166 per month.

Extra Payment Calculators:  To be honest, I’ve not come across many calculators that include this, there are great loan amortization templates for Excel that includes an extra payment field.  But if you find one, they offer some really great insight to how much time you can shave off your mortgage.  Sometimes only $50 per month can shave off 4 years of payments…and $100 can decrease your term by 7 years.

The problem with these calculators is too many people trust these as the final word…you want the final word, discuss the terms with your loan officer…they will show you exact fees and such.  So, get the estimate, then determine if you can support the loan with your current income…if not…renegotiate, turn to creative options, or find another home.

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Some related links:

Federal Reserve Mortgage Calculator Rates
How to Calculate a Mortgage

Related posts:

1. Choosing the Right Mortgage Broker, Mortgage, and Mortgage Insurance
2. What is a Mortgage? A Pledge Until Death?
3. The Benefits of Mortgage Refinancing
4. What is Mortgage Refinancing?