Home Loan Calculator: Find Out What Your Monthly Payment Could Be

Buying a house is a complicated and drawn out process. You can’t just look through a list of homes for sale, point at one, and buy it that afternoon. Homes have to be inspected, mortgages must be applied for and approved, you have to look at the neighborhood they’re in and how the surrounding area is developing, and there are other people that are shopping for a new house and may want to buy the one you’re looking at.

And because it’s one of the most expensive things you can buy, you don’t want to get a 15 to 30 year, $200,000+ home loan for a house you “kind of like”. You have to love it. The tiny things you think you can overlook now may end up becoming eyesores 5 years from now. To top it all off, you have to be able to afford the home you’re purchasing or you can end up in foreclosure a few years from now.

To make sure your new home loan fits nicely into your budget, you should use a home loan calculator to get an idea of what your monthly mortgage is going to be.

How to use a home loan calculator

Applying for too many home loans at one time may negatively impact your credit and make getting approved for a mortgage that much more difficult. Using our home loan calculator will help break down a house’s sticker price into a monthly payment. This way, you’ll know which houses you can afford and when it’s time to actually apply for a loan.

To use this calculator, simply enter the information in the bullets below into their respective fields and your monthly payment figure will update along the way.

• Home price: The value of the home you hope to buy.
• Down payment: The amount you’ll be putting down at signing
• Interest rate: The percentage you expect to be approved for
• Loan term: The number of years your mortgage is financed for (normally 15 or 30 years)

What to look for when buying a new home

Before you buy a home, you need to have it thoroughly inspected regardless of how old it is. Homes are expensive and repairs to major portions of it aren’t cheap either. If you buy a home without knowing that the AC is on its last legs or the roof has a leak in it, that’s your problem now, not the previous owners. To make sure you don’t get saddled with these responsibilities, get your home inspected and find out the condition of the areas below.

Age of AC / Heating Units

Going through a hot summer without AC or a cold winter without heating is unbearable. If these units are close to or over 10 years old, chances are quite good that you’ll have to replace them in the next 5 – 10 years. Maybe sooner. This means you’ll have to shoulder at at least $5,000 in additional expenses outside the cost of your new home. If the units are older, schedule a heating / AC company to do their own inspection. The cost of an inspection now could save you thousands later.

Condition of the Roof

Your roof is constantly exposed to the elements and has to weather rain, hail, high winds, and all manner of debris. While they’re designed to handle the abuse, the smallest bit of damage to your roof can cause a small leak that can result in significant water damage. A new roof will run you at least $10,000 and if you buy a new home that has a leaky or damaged roof, your insurance company may not cover its replacement. And the larger your new home, the more expensive a new roof will be.

Fence Condition

While some insurance companies look at fences as “cosmetic” additions to your home, the rest of us understand that they’re vital to the security of your home, they create a private and safe outdoor space for your family to enjoy, and that good fences make good neighbors. Replacing a fence is not cheap and the bigger your backyard, the more expensive it’ll be. Leaning fence posts, broken boards, and rotting wood means it’s time for a new fence. The average cost of a fence in Texas is $5,000, but yours could be much higher depending on the size of your yard, materials use, and the height of your fence.

Is the Foundation level?

This is the most overlooked part of buying a new home. Most of us just assume that the foundation is sound and don’t give it a second thought. The foundation of your new home needs to be level and if it isn’t, this absolutely, positively needs to be fixed before you sign any documents. An uneven foundation can crack, cause doors to stick or be stuck closed, and cause many other problems that can cost you tens of thousands of dollars to fix.

Home Loan FAQs

What types of home loans are there?

There are two main types of loans, fixed rate and variable rate mortgages. As their names imply, the fixed rate loan will have a fixed interest rate through the life of the loan whereas the interest rate on a variable rate loan will fluctuate based on the market. Typically, fixed rate loans are the way to go. These two loans types also break down into other types of loans like VA loans, FHA loans, USDA / RHS loans, etc.

How much do I need to put down at signing?

Your down payment will vary from lender to lender and it will depend on what type of mortgage you have. For instance, most VA loans don’t require anything down at signing. However, the general rule of thumb for a down payment on your mortgage is the standard 20%. So, if you’re buying a $100,000 home, your down payment would be $20,000.

What is a good interest rate?

Interest rates vary on a variety of factors including your credit history, down payment, length of mortgage, and so on. These criteria also vary from lender to lender. However, Bankrate.com recently concluded that the national average for mortgage interest rates for 15 year fixed rate mortgages is 3.55% and 4.20% for 30 year fixed rate mortgages. (Bear in mind, these rates will fluctuate so what’s listed on our site may differ than what’s on Bankrate’s website as their figures are update each week.) If you fall near or below those figures, it’s safe to say you have a good interest rate on your mortgage.

What costs are due at closing?

Some closing costs include appraisal fees, inspection fees, interest fees, title fees, among other costs. You may also not owe these at closing depending on whether the buy or the seller is going to cover the closing costs. Sometimes both parties pay their own closing while other times a single party may cover all closing costs depending on the negotiation process.

What’s the difference between pre-approved and pre-qualified?

When you’re pre-approved for a home loan, you have provided your lender with the necessary information to determine which loan program you could be qualified for. Being pre-qualified is when the lender has done their leg work and has all the information they need to submit your loan for underwriting and approval.

What is the principal in my home loan?

Principal, as it relates to mortgages, is the balance left unpaid on your home loan since it is the amount borrowed from your lender minus the payments you’ve previously made.