What’s a mortgage calculator?

mortgage calculator

To fully understand what a mortgage calculator is, you need to be familiar with the following terms explained below:

Down payment

From a mortgage brokers point of view, a down payment is any amount put towards and/or the first payment towards buying a house. Most down payments are 30% of the original price of the property and it’s also called the declaration money. In any mortgage loan plan, there is always a down payment.

Interest payment

This is the amount that is usually paid in addition to the total quantity that the property costs. These are made on the condition that there is value with time, hence the interests rates are either fixed, or they can keep on changing with time. The rates are a particular percentage of the total cost of the property.

Income taxes

These are annual taxes that the government places on an individual’s income, and is usually a combination of other taxes that include; federal tax, income tax, and PAYE, among others. In most countries, these comprise 30% of the total revenue an individual has or gains.visit the original source here!

Property taxes

This is a form of tax, based on homeowners, and the amount of tax paid is clearly based on the value of the property in question. The higher the value of the property, the higher the tax and vice versa.

Homeowners’ insurance

Most lenders require homeowner insurance for it acts as insurance to against damage protection for the home and personal property from a variety of risks such as, burglary, vandalism, fire and storms.

Mortgage insurance

These mostly consist of 20% of the actual cost of the house. The advantage of this type of loan is that it acts as an insurance, which protects lenders against some of the losses that can occur when a borrower defaults on a mortgage loan.

Loan term

This is the time that one chooses to pay off the loan; the period mostly includes the number of years that one needs to service the loan or to clear it.

Full report

A report consists of mortgage payment breakdowns, total payments among other important aspects involved in the loan debt.
So, what’s a mortgage calculator?

A mortgage calculator helps you to determine the total monthly mortgage payment. This includes, inclusive of downpayment, interest, taxes, and mortgage protection. The payment amount is based on the value of the home. The calculator sets default values of the property taxes, home insurance, mortgage insurance and other details.

mortgage calculator

With the above detailed information in the calculator, you can fix them based on your current situation and see where you fall in. The mortgage calculator also provides a mortgage amortization schedule that shows the money you ought to pay including the basic repayments and the interest over the course of the home loan.view more tips at http://www.csmonitor.com/Business/Saving-Money/2016/0414/What-a-mortgage-calculator-can-and-can-t-do

Mortgage loan brokers use a mortgage calculator to advise their clients the type of home or residence that they can fit in or their finances and trying to come up with a better mortgage plan for the interested parties.