Using Loan Calculators To Estimate Mortgage Payments

2007-11-09 05:11:17

( Financial )



Calculating mortgage payments before taking out a mortgage loan helps to budget your monthly expenses. Your monthly mortgage payments consist partly of principal repayments and partly of interest charges on the loan. However, the major portion of your monthly mortgage payment is credited to the interest on the loan. A mortgage payment calculator should be able to help you estimate mortgage payments that you need to pay to your lender.

Mortgage lenders and real estate professionals actually use a comprehensive table to estimate mortgage payments. The tables conveniently present the monthly payments already calculated for virtually all combinations you can think of in amount, interest rate, and term of the loan. Since you will not get access to these tables, you can purchase a mortgage loan payment calculator to estimate mortgage payments with ease.

You can also find online mortgage payment calculators that let you estimate mortgage payments for loans with fixed interest rates. You only need to enter some information such as the current interest rates, term in years and loan amount. After you click on the calculate button, you will be able to estimate mortgage payments.

By using mortgage payment calculators, you would also know the number of years when you can afford to repay the mortgage. If you want to save on interest rates, you can estimate mortgage payments on a fifteen year fixed rate loan. But if you want lower monthly payments, you can place twenty-five or thirty years to the mortgage term.

Unlike the method that lenders used in calculating mortgage payments, the results in using online mortgage payment calculators may contain errors. These errors may be due to some assumptions incorporated in the calculators which may not be applicable in your personal circumstances. If you want to correctly estimate mortgage payments, you can ask your lender to provide you the data.


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