Mortgage Calculator: How to Estimate Your Payments

When looking at residential listings, one of the most important factors to keep in mind is budget. Knowing what your budget is and how much property you can afford will help make the home-buying experience much more efficient. This entails estimating your monthly mortgage payment. But how exactly do you estimate mortgage costs before you purchase a home? 

Salmon Real Estate is one of the oldest independently owned real estate companies on Staten Island, New York. Here, we explain what to know when estimating your future mortgage payment, along with resources that can help, such as our mortgage calculator.

What Is a Mortgage?

Very rarely can a home buyer afford a home with cash all upfront. In many instances, buyers will pay for a percentage of the home’s cost as a down payment and borrow the rest. A mortgage is an agreement between the home buyer and a lender that gives the lender the right to take the property if the buyer fails to repay the money they borrowed. 

Obtaining a mortgage from a lender may require going through some obstacles. Borrowers must meet certain criteria, such as credit score and proof of income. Mortgages are available in a variety of types, including fixed-rate and adjustable-rate.

Using a Mortgage Calculator

Rather than doing the math themselves, potential home buyers can use a mortgage calculator to get a better understanding of what they can afford. They are a great tool that allows you to plug in the numbers to estimate your total mortgage payment. The information you will need to use a mortgage calculator includes: 

Home price: The list price of the home is needed to determine the monthly mortgage payment. 

Down payment: How much of a down payment a buyer makes will contribute to their monthly payment. The larger the down payment, the lower the monthly mortgage payment. 

Loan term: The loan term is how long a borrower has to pay back the loan. The longer the term, the less the monthly payment will be, but the more interest the loan will collect. 

Interest rate: This field is pre-filled with the current average mortgage rate (3.850%). Your actual rate will vary based on factors such as credit score and down payment.

Property tax rate: A home’s property taxes also are necessary to consider. The mortgage payment calculator includes estimated property taxes based on the home's value. 

Home insurance: In most scenarios, homeowners’ insurance is required by lenders. Some loan programs may not necessitate insurance. The mortgage calculator will allow you to edit this number to get a better understanding of your monthly costs. 

HOA fees: Certain types of residential properties require individuals to pay a homeowner’s association (HOA) fee. This monthly payment is used to maintain the neighborhood and make improvements when needed. 

Mortgage Experts at Salmon Real Estate

Those who wish to own a residential or commercial property on Staten Island or in one of its neighboring communities should turn to the experienced real estate professionals at Salmon Real Estate. Since 1956, we have gone above and beyond to help clients buy or sell homes. To deliver the highest quality of service, our team uses a hands-on approach and top-of-the-line resources, such as a mortgage calculator.

For more information about our offerings and how we can help you find your ideal property, contact us today at Salmon Real Estate.