How to Calculate Mortgage Payments

Figuring the right way to calculate your home mortgage is one of the most important components to buying a home.

How to Calculate Mortgage Payments:

There are several parts to a mortgage payment. Not including every detail can cause an unpleasant and extremely mortgage calculatorstressful time for you the home-buyer. You are going to calculate the monthly mortgage payment (principal plus interest) based on the loan amount which is the amount of money you are borrowing. You have to consider the term of the loan, meaning how many years it will take to pay off the loan, as well as the mortgage interest rate you are able to get on the loan. Most mortgage companies and banks have actual MORTGAGE CALCULATORS on their websites for your convenience.

You will need to determine the annual property taxes for your new home. The seller or listing agent can help you with that amount. You will divide this number by 12 to get your monthly taxes on your home.

Homeowner’s insurance is a must. It will not be optional. You will need to get an annual insurance quote from your insurance company. They will need to provide a declarations page to the mortgage company as proof of the insured.

If your loan program requires private mortgage insurance (PMI) you will need to figure that number as well. PMI is required by many lenders on first-time buyers due to the amount of down payment they are able to pay. Your mortgage company will help you understand mortgage refinancing and private mortgage insurance and whether it is applicable to your loan.

For Example:

Loan amount: $150,000
Loan Term: 30 years
Interest Rate: 4.75%

Monthly Mortgage Payment: $782.47

Mortgage Loan Payment $782.47 + Monthly Taxes + Monthly Homeowners Insurance = Total Monthly Payment

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