Mortgage Calculators – How Do They Work Why Should You Use One?

If you are buying a home or refinancing, mortgage calculators are invaluable, but you need to know how to use them the right way. In this blog post we’ll show you how and as an added bonus we’ll show you how you can get a mortgage preapproval for up to 90 days AND your offer will be just as good as cash.

Use Our Mortgage Calculator as a Negotiation Tool

Now, depending on how much home you’re going to purchase our mortgage calculator will give you a great idea of exactly what your principal, interest, property taxes and homeowners insurance (HOA) will look like.

But that’s not all. Once you get a good idea of your costs, you may want to negotiate a little harder asking for seller concessions. These can be creative, like costs for new carpets, siding, or repairs. This tactic usually works great in a down market and here’s why.

Rather than drop the price, the seller may want to get as close to list as possible. The seller may well agree to kick in some perks. Mostly this is for tax purposes. You’ll always want to consult with a professional about seller concessions and what’s reasonable. OK, on to the calculator.

Check Out Our Online Mortgage Calculator

Let’s look at our very cool, Embrace Home Loans® mortgage calculator. It offers a wide menu of mortgage calculation options, including estimating your mortgage payment, with taxes and insurance included. Using the calculator is easy. Just enter the price of the home, including your down payment, and add in any details about the home loan to calculate your mortgage payment breakdown, schedule, and interest rate costs, among other calculations.

Our calculator also offers you an option to get pre-qualified for a home mortgage, because we’re all about making things as easy and convenient as possible for you.

Above you can see this is purchase. Pretty standard. We select “loan type” first which is purchase. We enter the home price and down payment. Term in years (not months) and the interest rate.

What’s cool about our calculator is you get to see what your equity looks like at the end of the loan term. And who doesn’t love to see that beautiful blue equity line heading up and up!

See How Your Monthly Mortgage Payment Breaks Down

If you want to see how your payments breakdown in a chart format, just click on the Payments tab best to Schedule.

Next, let’s click on the “advanced” option at the bottom. This is where you can get more detailed in your total costs by adding in property taxes, homeowners insurance, mortgage insurance, and homeowner association fees as seen here:

In the end, you’ll have an excellent idea of where each dollar goes every month. We even have some examples you can practice with listed below our online mortgage calculator.

There Are Added Factors That Can Affect Your Payment

Keep in mind that even though calculators like ours are detailed, additional factors can impact your monthly payment and your monthly budget. You should consider things that are regular costs you’ll have to pay to as a homeowner. For example depending on where you live, you may need to buy flood insurance, tornado insurance or hurricane insurance.

Here are some other costs associated with buying a home:

• Closing costs – costs like appraisals are a common part of the homebuying process, and they’re not free. Normally they’re built into the closing cost of your loan.
• Lender Fees – mortgage lenders all charge different fees to finance their services. These fees can include simple processing charges and others, like origination fees.
• Taxes – most new homeowners have to pay government fees associated with transferring ownership of the property from the seller to the buyer. These fees are separate from property taxes.

You see, even the best mortgage calculators can’t accurately account for absolutely everything. So go ahead and play around with our calculator and run through all your scenarios. It’s a good exercise.

Next You’ll Want to Talk to Your Embrace Mortgage Specialist

Then, when you’re ready make an appointment with a Loan Officer at your local branch. We’ll help you get pre-approved so you have a specific budget you can work with while house hunting.

Plus we can take it way further than most any other lender with our Approved to Move™ program. With Approved to Move™, all your information is verified – bank records, tax statements, income, assets, credit scores – giving you an offer as close to cash as possible and good for 90 days.

No mortgage calculator is going to do that for you. That’s why we’re ready to work with you right now!