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Information on mortgages, home equity loans, and consumer credit to help you use the power of financing to your advantage.
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Mortgages > Purchase
Mortgage Calculator
Mortgage calculators are everywhere these days. On ledingtips.com you will find many resource links to your mortgage calculating needs! When you do your calculations for your own mortgage make sure you have the basics at hand. Here are some tips for helping you along with some calculations for your mortgage broker or lender that they will need from you. The mortgage broker or lender can calculate these numbers with a full mortgage application and paperwork filled out, but you can give them this to start with to find the best mortgage option.
Calculate your income (yearly income divided into 12 months).
Calculate your monthly debt payments (your total monthly debt payments)
Calculate your monthly PITI information. PITI – Is an acronym for “Principle, Interest, Taxes, and Insurance”.
Calculate your Loan to Value ratio. Taking the amount of loan you desire divided into the value of the home (the value of the home should be what the appraisal company sees the value being).
Calculate your monthly homeowners insurance (call your insurance agent)
Calculate your taxes on the new home. You could use 2% of the home value for a guess, or ask the town clerk, real estate agent, or previous owner for the tax information.
Calculate your monthly mortgage insurance (please check with your mortgage lender for this information. Many times mortgage insurance can be waived with higher rates. Typically mortgage insurance is eliminated with 80% loan to value ratio (putting 20% down of the appraised value). The more money you put down on your home the lower the mortgage insurance payment.
Pre-qualified mortgage calculation – Many mortgage brokers will do a quick “qualifier” ratio to calculate if you qualify for the standard “cookie cutter” mortgage before even pulling your credit. This is referred as a “conforming loan”. Conforming loans usually have the best interest rate attached. If you take your total monthly debts (credit cards, car payments, personal loans, new house payment (PITI) etc.) and divide that by your total monthly income (business and investments) this number shouldn’t be below 36%. This ratio is called the “back end” ratio. This calculation is basically the same for all lenders, but the qualifying ration determines greatly on the lender you are dealing with. Remember to keep your budget in sight. Just because a broker or lender says you qualify for a certain loan amount doesn’t mean you should necessarily shop for a house of that size. Remember you are responsible for repaying that loan, so don’t strap yourself to your new mortgage payment and get stressed out every month just to afford your new mortgage. Be responsible in calculating your mortgage. Check around the site for mortgage companies mortgage calculators.
• Apply now for a home loan!
The tips on this website should be considered food for thought only. Lendingtips.com is a clearinghouse of ideas, not a professional adviser. Before any important decision, please consult the appropriate professionals (lawyer, accountant, real estate agency, broker etc.).
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• Mortgages > Purchase Articles Archive
• Mortgage Loan Calculator Use this calculator to determine your monthly payment and amortization schedule.
• Mortgage Qualifier Can you buy your dream home? Find out just how much you can afford!.
• Refinance Breakeven Should you refinance your mortgage? Use this calculator to determine when you will breakeven!
• Rent vs. Buy Are you better off buying your home, or should you continue to rent?.
• Amortizing Loan Calculator Enter your desired payment - and let us calculate your loan amount. Or, enter in the loan amount and we will calculate your monthly payment!
• ARM vs. Fixed Rate Mortgage Use this calculator to compare a fixed rate mortgage to two types of ARMs, a Fully Amortizing ARM and an Interest Only ARM.
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