That you can calculate mortgage It is an important issue when you are about to apply for a loan and you find yourself in the best situation to access it.
If it is the first time that you will obtain a loan, it is best to use a bank loan calculator to make the calculation and then you will know in advance the value and other concepts of the payment of that loan.
How to use the mortgage calculator
Although you can resort to bank loan calculators for, nevertheless you will find several and therefore you must choose the one that corresponds to your purpose, for example:
- The most basic and ideal loan amortization calculator for you to calculate bank loans such as for the purchase of a car or for a fixed rate mortgage.
- The loan amortization calculator by size which gives you a general idea about what you will have to pay with the interest throughout the loan.
- The interest-only mortgage calculator, which is only useful if you accessed an interest-only loan, that is, you will pay only the interest that corresponds to the loan, differentiating itself from others in which you pay the balance of the principal or the loan throughout of a specific period.
In general, they are beneficial loans if you prefer to make small payments even if it involves a greater number of payments.
- The APR calculator is the one that determines your APR with the closing costs, but to make the calculation you must know the interest rate and the period of time that the loan will last.
In general, all these bank loan calculators allow you to calculate a bank loan but not others such as adjustable rate mortgages.
How to calculate a mortgage
Decide to calculate mortgage It is the most important thing for you before signing a loan, especially when it comes to a mortgage loan, since knowing those numbers as a result of the calculation that allows you to do the loan calculators allows you to make the best decision without surprises.
- First of all, knowing important and basic details about the loan, you can do the calculation with a bank calculator, do the calculations by hand or you can also use an online spreadsheet.
- As details that you must gather about the loan are the exact amount of the loan, the interest rate, the period of time it will take you to repay the loan, that is, the term, if it is an interest only loan, an adjustable loan, a at a fixed rate, etc.
- As other important details, you must consider the value of what you want to buy with the loan money and your monthly income.
Calculate mortgage for home loans
When it comes to mortgage loans, they are generally at a fixed rate, that is to say that throughout the duration of the loan the same interest rate is maintained and therefore the monthly payment will also be the same and in terms of at this time, most are 15 or 30 years.
Therefore, if this is your type of loan, you should use this formula:
Loan payment equals Amount divided by discount factor. In formula terms it is P = A / D.
Suppose you request a loan of $ 100,000 with a duration of 30 years and an interest rate of 6%, then according to the formula, you will pay $ 599.55 every month.
The amortization table gives you values that allow you to know each of your payments. You can do the calculation with a free online calculator and you can also make the amortization table by hand yourself.
Calculate interest-only loan mortgage
Taking the previous example of a loan that you access for $ 100,000 also with an interest rate of 6%, you will make payments of $ 500 every month, but you can finish the payments early if instead of $ 500 you decide to pay an amount higher.
In other words, the minimum payment is $ 500, but if you make larger payments, the loan balance will be reduced, although not immediately.
If you want to use the formula, the loan payment is equal to the amount times the interest rate divided by 12 or P = A xi.
Calculate mortgage ARM
ARM is the adjustable rate mortgage, which has a variable interest rate, so your monthly payments will vary based on the interest rate for that particular month.
- To make the calculation, you must know the amount of payments or months that remain on the loan.
- Create an amortization schedule according to the time left for the term.
- The new value of the loan will be the outstanding balance.
- Enter the new interest rate.
Always taking as an example the 100,000 dollars that you request as a loan, but with an adjustable interest rate of 5% and considering that you still have to pay 10 years to finish it, every month you will pay 1060.66 dollars.
Calculate the mortgage of a house
To calculate the mortgage of a house you must think about what you will pay every month, since the payment is made up of several concepts such as mortgage insurance, house insurance, house taxes, the homeowners association fee and the principal amount and interest.
The principal amount and interest is what takes up most of the monthly payment.
The principal amount is the amount you pay every month for what the bank lent you, while interest is the rate that the bank charges you when you have accessed the loan.
If your loan is at a fixed rate, you will not have surprises with your monthly payments because it will always be the same throughout the duration of the loan.
However, a part of the payment will correspond to the principal amount and another part of that same payment will correspond to interest.
Even at the beginning, the amount of your payments will correspond mostly to the interest and little by little it will correspond to the principal amount.
As mortgage calculators it has several options so that you can know how much interest you will pay and what is the balance of the principal and clearly you will obtain your repayment plan for your mortgage, for example:
- Login to mortgagecalculator.org
- Enter the value corresponding to the amount of the mortgage.
- Then enter the term, that is, the number of years of the mortgage.
- Enter the interest rate.
- Enter your annual property taxes.
- Enter your annual home insurance.
- Select advance payments between: None, monthly, annual or one-time payment.
- Enter the amount.
- Enter the payment start number.
- Click Calculate.
- You will immediately know the monthly payment, the value of the monthly payments corresponding to the principal and interest, and the value of the advance payments corresponding to the principal and interest.