Mortgage Calculators - All You Need to Know By John A Collins

If you are reading this you probably have access to the Internet. If you have access to the Internet then you've got a big advantage over the homebuyers of 30 years ago. You have access to innumerable mortgage calculators.

Mortgage calculators use loan amount, interest rate and the amount of time to pay off the mortgage to calculate your monthly mortgage payment. Monthly mortgage payments can include 1/12 of the annual property taxes, Homeowners insurance (yes, you need homeowners insurance and flood insurance if you need it) and possibly private mortgage insurance. Let's take each of these "extras" one at a time and see why you need them.

Property taxes are levied upon property by the local city or county. Property taxes pay for the local government. Paying property taxes in your mortgage insure the lender that your property will not have a levy assessed on it by the local municipality for unpaid taxes.

You absolutely need homeowners insurance. You have insurance on your car right? Why wouldn't you have insurance on something that is going to last longer than you will have your transportation? Your homeowners insurance insures you against general damage, fire, theft, personal injury and possibly (depending on your insurer) windstorm damage. The company that issues the mortgage wants to make sure that you are able to pay if something untoward happens to/on your property. If you live in an area that is susceptible to a "100yr" flood, it's a good idea to have flood insurance. Just ask some of the folks in the Midwest as to whether it's a good idea or not.

Private Mortgage Insurance (PMI) allows you to put a lower down payment on the home you wish to buy. PMI simply insures the lender that the mortgage will be paid should you eventually default on the mortgage.

Thirty years ago, prior to the Internet, lenders were dependent upon banks and mortgage companies to tell them what their mortgage payment would be. You told the lender how much you could put down and the lender told you what your payment would be. Today there are literally hundreds of websites that can give you a number as to what your mortgage payment will be based on the information you input. You input the data, and the free website calculates what your mortgage payment is going to be. You can change any of the variables and determine what payment fits your particular situation the best. Just like trying on a piece of clothing before buying it, the mortgage calculator tells you what is going to fit you for a long period of time.

Using a mortgage calculator will allow you the knowledge you need to approach lenders and help you determine how much of a mortgage and for how long you will need to pay on the mortgage on your prospective home. Mortgage calculators allow you to determine what property you can afford and keep so that the property is your home.

Discover more articles, resources, and a wide variety loan calculators on my personal blog. --> mortgage-calculator-loan.com

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