The most popular use for a mortgage calculator is to estimate the payment on a new mortgage. You simply plug in the number of years of the loan – usually 15 or 30; and the amount you will be financing. If you are using a certain bank’s or mortgage company’s mortgage calculator, the current interest rate may pop up automatically. If not, you will just enter that when prompted. The result will be your estimate monthly mortgage payment. Some mortgage calculators also enable you to help determine if you want to pay off your mortgage early. You can do this by using the extra payments function. You key in the extra amount you will pay monthly, and it will give you a new payoff date. You can also recalculate your amortization table to see how much less interest you will pay.
Mortgage calculators can also be used to help you decide if you want to put more down to avoid paying for personal mortgage insurance (PMI). If you put 20% or more down on your house, you are not required to pay for PMI. So you can add a 20% deposit into your calculations to see what you think.
Certain mortgage calculators also have a function to enable you to see if an adjustable rate mortgage makes sense for you, and some actually include your estimated taxes in the payment for you.
If you have plans to purchase a new home or commercial property, and have any questions about how to estimate your mortgage payment, turn to Arnie Traub – a trusted, licensed Realtor with over 16 years of experience. He can be reached at 386-295-2999.