One of the rules you may hear as a homebuyer is the 28/36 rule or the debt-to-income (DTI) rule. Home price, the first input for our calculator, is based on your income, monthly debt payment, credit score and down payment savings. Here’s a breakdown with an explanation of each factor and how it influences your payment. SmartAsset’s mortgage payment calculator considers four factors - your home price, down payment, mortgage interest rate and loan type - to estimate how much you will pay each month. Factors That Determine Your Mortgage Payment The numbers can always be adjusted later.įor a more detailed monthly payment calculation, click the dropdown for “Taxes, Insurance & HOA Fees.” Here, you can fill out the home location, annual property taxes, annual homeowners insurance and monthly HOA or condo fees, if applicable. Don’t worry if you don’t have exact numbers to work with - use your best guess. In the dropdown box, choose your loan term. There are three fields to fill in: home price, down payment and mortgage interest rate. The first step to determining what you’ll pay each month is providing background information about your prospective home and mortgage. N = Number of Monthly Payments for 30-Year Mortgage (30 * 12 = 360, etc.) How SmartAsset's Mortgage Payment Calculator Works P = Principal Amount (initial loan balance) Mortgage Payment Formulaįor those who want to know the math that goes into calculating a mortgage payment, we use the following formula to determine a monthly estimate: To find a financial advisor who serves your area, try our free online matching tool. You can also try our home affordability calculator if you’re not sure how much money you should budget for a new home.Ī financial advisor can aid you in planning for the purchase of a home. You can adjust the home price, down payment and mortgage terms to see how your monthly payment will change. It is highly recommended that you obtain loan pre-approval when shopping for a home, so that you can put in an offer and subsequently lock in the rate for your home loan.SmartAsset’s mortgage calculator estimates your monthly mortgage payment, including your loan's principal, interest, taxes, homeowners insurance and private mortgage insurance (PMI).Borrowers with higher credit scores may qualify for a lower rate, because the risk that they may default on the loan is considered to be lower. If you have a poor credit score, you may only qualify for a higher mortgage rate, because a lender can recoup most of the loan amount at a faster rate if the rate is higher. Your credit score is another important factor in determining your mortgage rate. Your location affects your mortgage rate, and may vary from 0.25% to 0.5% between lenders on any given day, depending on local laws, the competition for lenders, fees, and closing costs.
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