Estimated Mortgage Calculator
The purpose of the mortgage calculator is to provide you with a snapshot of estimated monthly payments. The mortgage calculator uses your inputs and a standard formula to calculate the monthly payments. The key factors that determine the monthly principal and interest payments are the loan amount, the length of the loan, and the interest rate.
Mortgage Down Payment Amount
The size of your down payment can affect not only your interest rate but also your mortgage payment. A bigger down payment reduces the lender’s risk, which can result in a lower interest rate. It also means you borrow less and pay a smaller monthly loan payment than if you put little to no money down. If you make a down payment of less than 20%, you will probably have to pay for private mortgage insurance.
Location is Part of Mortgage Calculation
The calculator will pull in real estate data to determine approximate taxes and insurance costs for your county. Some calculators may automatically know this if you have enabled location services.
Gross Annual Income
This is the amount of money you earn in one year before taxes. If you are self-employed rather than salaried, lenders usually require two years of federal tax returns. When that’s the case, the best number to put down is your taxable income.
Credit Status or Interest Rate
Some calculators may ask for your credit score range, which will generate an estimated interest rate for you. You might also be prompted to key in an interest rate you think you might qualify for.