How Monthly Mortgage Payment Calculator Works?

Calculating the amount you need to pay every month is very simple task in mortgages. You can use monthly mortgage payment calculator or calculate it by yourself. Formula is same for both mortgages and loans. This is the reason why loan payment calculator and monthly mortgage payment are used alternatively. Most of the people lose nearly 50 to 60% in their mortgage loan repayment. But it is not a good idea. Try to keep your loan repayment amount below 40%.

Given below is a formula which is used in the monthly mortgage payment calculator:

Monthly mortgage payment = [P*(1 + r)*n r]/*[(1 + r)n – 1]

Let’s see the abbreviation of every term

P – Indicates the principle loan amount

R – Indicates the mortgage interest rate

N – Total Number of months you are given to repay the mortgage

For example let’s calculate the monthly mortgage payment for 30 year mortgage with the interest rate of 7% and the principle amount of $100,000. Here the interest rate r is 0.00583, n is 30 *12 = 320. Here is the actual calculation

Here is the actual calculation:

Monthly mortgage payment = [$100,000(1 + .00583)320 x 0.00583] / [(1 + 0 .00583)320 – 1] = $584.81.

Mortgage monthly payment calculator is the first and foremost thing that every people who want refinance or buy a new mortgage search in the internet. By making use of mortgage calculator you can get the current mortgage rate by considering the today’s interest rate and price of your new mortgage.

For calculating the monthly mortgage payment you can use either a spread sheet or online mortgage payment calculators. You can find these calculators on every websites of the mortgage providers. Based on your inputs like interest rate, number of terms and principle amount these calculators will return the monthly mortgage payment.

All of us have studied this interest calculation in our high school math. But all tend to forget once the exam gets over. This is why most people prefer to use these online mortgage calculators.

We also have a mortgage function formula to calculate the mortgage in our spread sheet. You can utilize this when you don’t have an access to the internet.

Is your mortgage payment is affordable?

It is always safe to keep your monthly mortgage payment as an affordable one. When you apply for a mortgage make sure that your monthly payment does not exceed 1/3 of the after tax income. If it exceeds it is not an affordable one. Reconsidering your purchase will be a good option. Obtaining an affordable monthly payment ensures that you are not going to ends up with the foreclosure.

First calculate what is your 1 / 3 of your income. Now open any online mortgage calculator. Enter the interest rate and principle amount of your desired home; enter the number of terms it will show a monthly repayment amount. When this output is not comes under your range adjust the principle amount and recalculate until you get the affordable payment.

If you want to stay away from the foreclosure strongly it is recommended to consider the future expenses like your children education and 401k retirement schemes.

Well and good if your income grows every year but what if there is an unexpected job loss or decrements. So always get a mortgage at affordable principle prices and best interest rates.

 

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