Use A Real Estate Calculator For Calculating How Much Home You Can AffordLets face it, you need to know how much money you can borrow to get that house of your dreams. You’re going to want to know how much money you will be paying over a certain time frame. Whether you have a thirty year loan with a fixed rate or a shorter term loan with a variable rate, being able to calculate your expenses over time tells you what you can afford. A simple real estate calculator will need to know what the loan amount is – how much money are you planning on borrowing? What is the interest rate of the loan – are you paying 5.75%, 6.625%, 8.375%? And finally, what is the length of the loan – are you borrowing for thirty years, fifteen years, less or more? A longer term loan will result in lower monthly payments compared to a shorter term loan but will also result in a higher total payment over the life of the loan. Often times that longer term loan will result in a significant higher total payment then a shorter term loan. Given the loan amount, an interest rate expressed in percentage and a length of loan in years or months, your mortgage calculator will let you know what your expected monthly payments are (excluding taxes and pmi – private mortgage insurance). A amortization table will detail each month payment and break it down by interest paid and principal paid and keep a running total of interest and principal paid to date. Early in the life of a loan, the payment towards the interest portion of the loan is significantly higher than the payment towards the principal portion of the loan. |
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