An online home loan calculator is a great tool for homebuyers. You can use it in three ways, to find the monthly mortgage payment of a home, to find your maximum home purchase price based on your annual household income, and to determine you the maximum home price based on a specific monthly budget for housing.
But before you use a home loan calculator Texas, you need to know about a few things that you have to enter into the calculator. Here are the ones –
- Home price
Home price refers to the amount for which the home can be purchased. It is not the same as “listing price” that is the amount for which the home is listed for sale. This price does not include closing costs, as well as loan fees. It is the contractually agreed-upon price for a property.
- Interest rate
Your interest rate is the rate that you will pay to the lender over the life of the loan. Interest rates are expressed in annual terms. With fixed-rate mortgages, the interest rate will remain unchanged for the life of the loan. With an adjustable-rate mortgage, your interest rate may change after a fixed number of years. When using an online home loan calculator, you can use today’s mortgage rate for “interest rate”.
- Down payment
A down payment is an amount that you have to put into the house at the time of purchase. For example, if you want to buy a home of $ 100,000 and you make a $10,000 down payment, you will have $10,000 equity (10%) in your new home. Some mortgage programs, such as the FHA loan, need a 3.5% down payment, while the VA and USDA loans don’t require any down payment. But traditional loans need a 20% down payment. Your down payment may not be the only cash required at closing so you need to have a budget for closing costs and other items as well.
- Length of the loan
Sometimes known as “loan term”, the length of the loan is the number of years until the loan is paid-in-full. Most mortgages have a loan term of 30 years. But nowadays, there are the 20-year and 15-year fixed-rate mortgage as well. The monthly cost of a mortgage is higher with a shorter-term loan, however, less mortgage interest is paid overtime.
- Homeowners insurance
It is an insurance policy against your home that protects against a minor, major and catastrophic loss. All homebuyers need to carry such protection. Generally, this insurance policy should be in an amount that covers the cost to rebuild your house as-is. The insurance cost can vary by zip-code and insurer.
- Property taxes
These are taxes assessed on a home, as well as paid to your state, city or local government. Property taxes can vary in cost from one-half percent of your home’s value to two percent of its value or more on an annual basis. Along with homeowners insurance, property taxes can be paid in equal installments along with your monthly mortgage payment. This arrangement is referred to as an “escrowing” your taxes and insurance.
Now, give the inputs to various online home loan calculators and based on the result proceed further.