Mortgage Calculator
for Home Buyers
No matter the state of the local housing market, buying a home is a process requiring a strategic plan laid out with a qualified Loan Officer before diving in. If you are considering getting a mortgage, it’s important to understand what that means for you financially.
To get a better picture of what your mortgage might look like, you can use a mortgage calculator, which factors the amount you want to borrow with interest rates and loan terms to estimate your mortgage payments. Of course, you’ll also want to understand how payments can change over time and how your debt-to-income ratio can impact your mortgage.
Mortgage Calculator for Monthly Payments
*Treadstone Funding and its employees are not CPAs or financial advisors. Not financial advice. All information provided is for educational purposes only. Contact a licensed Loan Officer before proceeding.
How Do You Determine Your Monthly Mortgage Payments?
Frequently Asked Questions
Dollar amounts for the principal loan amount, interest, property taxes, and homeowners insurance, along with the interest rate and terms of your loan are used to calculate your estimated monthly home payments. To determine your loan eligibility, lenders will also calculate your debt-to-income ratio, multiplying your monthly income by 45% and subtracting all your existing debt payments. The result of that calculation will help lenders settle on a financially feasible amount to issue for your mortgage. For accurate calculations, contact a Loan Officer!
Your maximum monthly payment, along with all of your existing debts, typically should not exceed 45% of your income. When lenders calculate your debt-to-income ratio, they multiply your income by 45% and subtract your current debt payments to ensure you bring in enough money to take on a mortgage loan. Factors beyond debt-to-income ratio can also apply, like additional living expenses outside of debts.
You can pay your mortgage payment early, but it is best to do so directly through your mortgage company or loan servicer, so you can ensure the advanced payment is applied to your principal balance. Some lenders will default to applying the payment to your minimum amount due for the next monthly payment, which won’t reduce the amount of interest you have to pay. As such, it is best to connect with your lender directly to understand how the payment is applied.
If your homeowners insurance premium or property taxes change significantly and you have an escrow account, your lender might adjust your monthly mortgage payment to a lower or higher amount depending on which direction your taxes and insurance changed.
*Terms and qualification are subject to underwriting approval and can change without notice. Not all borrowers may qualify. Example figures are for illustrative purposes only.
