When you’re considering buying a home, you want to make sure you choose one that you can afford. But how do you know? Integrity First Lending’s mortgage payment calculator can help.
How Do You Use a Mortgage Payment Calculator?
Integrity First Lending has a tool that makes it easy to calculate your mortgage payments. Simply plug in the numbers: the cost of the home, your down payment, the interest rate, the term you are choosing and the type of mortgage you’re applying for. Our mortgage payment calculator then gives you an estimate of what your monthly mortgage payments will be.
This figure is an estimate because several factors can affect the final number:
- Type of interest rate: If you choose an adjustable-rate mortgage rather than a fixed-rate mortgage, your monthly payments can change — sometimes significantly — with the going interest rates.
- Taxes: If the city, town or state you live in raises property taxes, your monthly mortgage payments will go up. Most mortgage lenders collect tax payments from homeowners every month to put in escrow to pay their property taxes. So while property taxes are not technically part of your mortgage, you pay them at the same time as your mortgage. However, even when you pay your mortgage off, you must still pay property taxes, although if you are elderly, you may be eligible for a reduction in the amount.
- PMI: If a homebuyer does not put at least 20% down on their home, they must pay private mortgage insurance until 20% equity is reached. This number is often $100-$200 per month, depending on many factors, including your credit score.
Determining How Much House You Can Afford
The beauty of our mortgage payment calculator is that you can play with the numbers and make adjustments to find a way to make buying a house affordable for you.
For instance, if the mortgage payment calculator says your payment will be about $2,000 and that is too much for you, try lengthening the term to see how much it lowers your payments. Or, if you can borrow money from a friend or relative to increase your down payment, this will also decrease your monthly payments.
If you can’t find a way to make the numbers work, consider shopping for a lower-priced house.
As mortgage lenders, we sometimes see homeowners who do not leave themselves enough wiggle room with their mortgage. They take on a large mortgage that they can technically pay, but if something unexpected happens — a job loss, an expensive car repair or another financial setback — it can quickly tip the scales, putting them behind on mortgage payments. This is not only stressful, but it affects your credit too.
It’s better to leave yourself a little cushion when shopping for a home loan in Utah.
Your Friendly Mortgage Company in Utah
Now that you know how our mortgage payment calculator works, play with it for a little while and then come in and see our mortgage lenders. We’ll collect some information from you, such as your income, credit score, debt-to-income ratio, etc., and run the numbers to see what type of mortgage you qualify for and how much house you can afford. Once you are pre-approved, you can start shopping for a home in Utah with confidence!