What You Need To Know About Quick Mortgage Calculator

Today most of the people who aspire to buy a home in Canada are looking for a step ahead to find out more about the interest rate, down payments and repayments. It is all about making sure that payment which they are investing for their mortgage fits under Canadian mortgage rates. To get all your answers related to payment estimation, a mortgage calculator is a great tool to get to know about the mortgage rates and income. A mortgage calculator can calculate mortgage payments and an amortization schedule for your records.

Let's look at how easy the process is of understanding a quick mortgage calculator.

• Mortgage Principal

When you get your hands on a quick mortgage calculator, you’ll need to be clear about the amount of investment. If you have a mortgage payment currently, this is likely the amount you owe on your home. If you are planning on purchasing a new home, this will be the purchase price plus closing costs minus your down payments. Closing costs include the value of the attorney, loan origination fees, and additional fees like bonuses, surveys, inspections, etc. Get clear about it with the help of the trending mortgage rate and add 5% to the amount financed as estimation.

• Mortgage Interest Rate

The interest rate is an essential factor that will help you get your gross mortgage amount in the form of the monthly payment. Here some of the mortgage lenders allow you to purchase points also referred to as an origination fee that will lower your interest rate.

• Length of Loan

The length of the loan is the number of months you have the loan financed for.

Here is the quick formula to evaluate the mortgage payments:

M = P[r(1+r)^n/((1+r)^n)-1)]

M = monthly mortgage payment

P = Actual loan amount

R = Interest rate

If your interest rate is 5%, your monthly rate will be 0.004167 (0.05/12=0.004167)

n =Number of Payments

For example, a 30-year fixed mortgage would have 360 payments (30x12=360).

This formula can help you crunch the numbers to see what kind of house you can afford.

• PMI, Taxes, and Home Insurance

For your financial convenience, a quick mortgage calculator allows you to include estimated taxes, mortgage insurance, and private mortgage insurance (PMI). These insurance calculations are helpful in making the escrow payment. PMI is required in many cases where you are not putting a minimum of 20% of the amount as a down payment.

• Calculating Payments

The results of the calculator can be viewed on-screen. An amortization schedule can be printed for you to keep for your records. This information is helpful in that you can see what your payments are and how much interest is left to come over in the time.

The Takeaway

This is all you need to know to use the quick mortgage calculator. These calculators are used for clarification of all the financial terms that are required in buying a new home.