For most people, a home is their largest purchase. At REILLY, REALTORS®, we encourage our home buying clients to spend time evaluating how much to spend on a home, to choose a lender wisely, and always go into the contract negotiation phase with a pre-qualification letter in hand.
DETERMINE HOW MUCH YOU CAN (OR WANT TO) SPEND
It's important to remember that when you take out a mortgage loan, you are pledging your home as collateral to the mortgage provider, which is most commonly a mortgage banker, a commercial bank or a credit union. Should you default on their monthly payments, the lender has a claim on the house.
When you enter a mortgage agreement, you’re agreeing to make a down payment on a house, followed by a period of payments - including interest - over a period of time. Buyers typically put 20% of the home's sales price down, and usually choose to pay off their debt over a period of 15 or 30 years at various interest rates.
Although lenders will advise you on the size of your mortgage, only you know what you’ll be able to comfortably afford to pay each month. Keep in mind that your monthly payment will also include home insurance and taxes. Use our Mortgage Calculator below to determine what you’ll pay in principal and interest. You can calculate what-if scenarios by varying what percent down you pay, interest rates and the length of your mortgage.
The mortgage calculator can be used to figure out monthly payments of a home mortgage loan, based on the home's sale price, the term of the loan desired, buyer's down payment percentage, and the loan's interest rate. This calculator factors in PMI (Private Mortgage Insurance) for loans where less than 20% is put as a down payment. Also taken into consideration are the town property taxes, and their effect on the total monthly mortgage payment.