Simple Mortgage Calculator

Purchasing a home is an amazing decision and one that should not be made too easily. It can help you considerably to learn how much of a home you can afford before you go home shopping. The fact is simple. Get the best mortgage that you can but do not get so much of a mortgage that you struggle to make the payments each month. When you can find the best mortgage for your needs, you will be able to make the payments comfortably and you do not have to worry about making ends meet.

For many people, though, it is hard to imagine what amount they can afford. Can you afford to purchase a $250,000 home or should you stick with a $150,000 range? Before calling on your real estate agent, take the time to consider how much of a home you can afford. A good place to start is with a mortgage calculator that helps you to calculate the monthly payment of the loan you are getting.

Getting the information down

Before you can use a mortgage calculator to really give you answers, you have to know a few things. First, know your budget. Here are some questions to get answers to:

1. What are your monthly, reliable incomes? If you are paid different amounts each month, find the average for your monthly income.
2. What are you stable monthly bills? Things like your car payments, your cell phone bills and other bills that you may have. Total this.
3. What are the projected costs of things like your utilities for the home that you are considering purchasing?

This gives you an idea of what your budget should be. Don't forget to calculate gas and food costs as well. You should budget for entertainment, credit cards and savings as well. Once you have this information down, you can begin to look for answers about your ability to pay on a mortgage.

Using your mortgage calculator

Now that you have a basic idea of how much money you have to pay on a mortgage, you can work with a mortgage calculator to help you to find the best monthly payment for your needs. A mortgage calculator will help you to gauge the approximate cost of the loan that you are looking for on a monthly basis. Here are a few examples.

Let's say that the current rate for mortgage loans for your credit range is 7 percent. You know that you will want to consider a 30 year mortgage loan, one of the most popular choices available today. Later, you can change these terms to see how they affect your ability to purchase a home as well. For now, here are some examples for you. When you use a mortgage calculator, you can enter in this information.

Then, do another calculation such as this to see the difference in purchasing a different valued home:

You should do this several times with your mortgage calculator to help you to see the difference in the cost of the loans you can obtain. For many, the goal will be to find the right range for their budget. You can clearly see just how much of a home you can afford by seeing where your monthly budget puts you and how the loan works out for you.

Base your decisions carefully: play with the numbers

With the help of a mortgage calculator, you can find out just how much of a home you can afford. Can you make a payment of only $1100? If so, then based on the same information listed about in terms and interest rates, you'll want to start looking for a home in the range of $160,000 to $170,000. You may also want to consider changing other factors in your home loan estimates. Here are a few other things to take into consideration. Use a mortgage calculator to help you get more answers.

Use the mortgage calculator to help you to calculate the cost of a loan per month when it is a 20 year term or a 40 year term in comparison to the 30 years. This will show you the difference per month and help you to determine the right cost of a home if you lengthened or shortened the term. (Remember that the longer you hold the loan, the more you will pay in interest on the home in total even if the monthly payment is lower.)

Use the mortgage calculator to look at different interest rates and how that effects your ability to make a payment on the mortgage every month. For example, just a few percentage points can make a considerable different. The 7 percent listed may be a bit higher for those that have a lower credit score. You may qualify for a lower cost too if your credit score is better. Of course, interest rates change all of the time so this number needs to move to accommodate this difference.

When you use a mortgage calculator to help you, you can see just how much purchasing a home will cost you. For many people, the benefit here is being able to afford more home than they thought. For others, this can pay off and keep you from dreaming of a home that is too far out of your reach. Use a mortgage calculator to help you to find the right affordability in terms of your budget. Help yourself to be an educated home buyer but using these facts to help you to get the best loan on a home that you can completely afford. It will make buying a home much simpler for you.