Finding the best mortgage isn’t the easiest thing. For most people, it takes years of consideration and hard work before they can consider buying a home. When you are ready, you have to first understand if you can afford the selected property and can repay the dues on time. Mortgage is great for financing your home, but if you don’t pay the instalments and other things on schedule, your credit score and financial status will be adversely affected.
Thankfully, there are a bunch of mortgage calculators like https://onqfinancial.com/financial-tools/mortgage-calculator/ that can come in handy. Most of these calculators use a few parameters to decide the monthly mortgage payments for a given scenario. In this post, we take a look at the things that matter.
- The price of the house. This refers to the value of the property that you have selected, and eventually, everything will be decided around it.
- Down payment. Before you can get the loan, you have to pay a down payment for your home, which is the upfront price from your pocket. Traditionally, 20% is the standard, but your lender will accept a lower amount in certain cases. The more you pay in form of down payment, the lower will be your interest rate.
- The term. This refers to the number of years the mortgage will continue. So, if you go for a 30-year mortgage, you will have to pay less each month, but the final amount paid in interest will be huge. A 15-year term means more in monthly payments and less in interest.
- The mortgage interest rate. This is what most homebuyers are concerned about. Interest rates are decided on several factors, including credit score and income of the concerned applicant. You can check online to get an idea as how interest rates are decided.
- Property tax. Expectedly, you will have to pay a tax on the house, which is called the annual property tax, and that’s usually around 1.5% of the actual value of the house. Annual Property Tax varies from state to state, so check the details in advance.
- Homeowner Insurance. It should be noted that Homeowner Insurance isn’t always compulsory, but often needed. It depends on the location and refers to the premium that’s paid to insure the property.
Mortgage calculators can be really useful in finding your monthly payments before approaching a lender. Check online now for more information.