Using Mortgage Calculators to Estimate Your Mortgage Budget

March 23rd, 2016

Using Mortgage Calculators to Estimate Your Mortgage Budget

One of the first questions homeowners and home buyers ask before they refinance or purchase a home is: Can I afford it?

Although this seems like a fairly straightforward question, the truth is that finding an answer isn’t as easy as it seems. Carefully assessing your current budget and income can take hours of your time; and predicting your future budget and income can feel challenging and uncertain. Furthermore, calculating the monthly payments for a long-term loan can be confusing, since homeowners must pay off both the principal and interest portions of the loan over time while also factoring in variables like inflation and taxes.

Luckily, a number of tools and resources exist to help homeowners and buyers gain clarity on their finances — including a set of calculators provided by the team at Accurate Mortgage. Learn more about these tools below and feel more confident as you estimate your future mortgage budget.

The mortgage affordability calculator is a simple tool designed to help home buyers and homeowners determine the mortgage amount that is best suited for their budget. To use this calculator properly, it’s important to first look over your current income and expenditures to determine a monthly payment amount that you can comfortably afford. Although sources vary, most financial experts agree that homeowners can reasonably dedicate anywhere between 20 and 45 percent of their monthly income toward their mortgage. Once you’ve determined a monthly mortgage budget, use this calculator to determine what size loan makes sense for you. Not only will the calculator help you understand how much you can afford, but it will also show you amortization — that is, the amount of your monthly payments which will go toward interest and principal over time.

The monthly mortgage payment calculator shows home buyers and homeowners the amount of their monthly mortgage payments over time, based on the amount and terms of their loan. Use this calculator by entering the purchase price, down payment, term, interest rate, and start date for the home you’re buying, refinancing, or considering to buy. Then, view the monthly payments, total loan amount, total number of payments, total interest amount, and pay-off date for your mortgage. Use this information when creating your overall family budget so that you know exactly how much of your income will go toward paying off your home — and how much you’ll have leftover to pay for necessities like food and utilities.

The mortgage refinancing calculator is designed specifically for homeowners looking to refinance their home. Insert the details of your current home loan and potential refinanced loan — along with any fees associated with the refinancing process — to see how your monthly payments will change over time. The refinancing calculator provides a detailed picture of monthly payments, total payments, total interest, and pay-off dates for both your current loan and a refinanced loan so that you can easily compare the two.

Use these calculators to start balancing your home-buying budget for the future. Once you’ve established an idea of what you can afford, contact the Accurate Mortgage Group team to get started.

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