When buying a home, you will need to determine if you can afford the monthly payment for the house you have chosen. Many times people don’t think about the additional fees that are usually added to your monthly mortgage payments and therefore estimate a payment that’s not accurate. Then they later find out they can’t actually afford the adjusted monthly mortgage payments once those typical fees have been added. Don’t let that be you. You can easily avoid this scenario by using a mortgage loan calculator with taxes and insurance. While there are sometimes other fees in addition to the taxes and insurance, these are the ones that will make the most impact on what you will have to pay each month. Therefore, it’s worth taking the time to input your details into a mortgage loan calculator with taxes and insurance.
We would like to help you make sure you can afford your monthly mortgage payments. Therefore, we are going to provide you with a mortgage loan calculator with taxes and insurance that you can use. Some of these calculators will also allow you to determine other factors, such as private mortgage insurance (PMI), interest rate, payment frequency and an amortization period. We will also provide you with ten tips for fitting your monthly mortgage payments into your budget. So let’s get started.
What Does PITI Mean?
The term PITI is an acronym mortgage lenders use to describe the different factors that make up your monthly mortgage payments. The term PITI stands for principal, interest, taxes and insurance.
Principal. This is the amount of your loan. When you make your monthly mortgage payments, a portion of that payment will go to what’s called the principal. Paying the principal amount will gradually reduce your outstanding balance while increasing your home’s equity, which is the portion of the home you own. The principal amount paid towards your loan is usually very small at first, but will increase over the life of your loan as your mortgage balance gets smaller. There are some exceptions to this such as in the case of an interest only mortgage, which doesn’t include any principal payments for the first few years, usually between five to seven years or so.
Interest. The interest is the amount a mortgage lender will charge you for your loan. The interest is a percentage of the principal and this amount will get smaller as your outstanding principal amount gets lower. You can pay more towards the principal of your loan each month to help pay off your house more quickly and to lower the amount of interest you have to pay each month. Additionally, once you reach 20 percent equity in your home, you will no longer have to pay the PMI insurance required by your lender.
Taxes. It’s common for homeowners to have their annual property taxes included as part of their monthly mortgage payments.
Insurance. This is your homeowners insurance and it’s commonly included as part of your mortgage payment. Homeowners insurance is also required by the lender until your mortgage loan has been paid in full. Additionally, if you put less than 20 percent down on your home, you will also be required to pay a monthly PMI payment as well and this is also commonly included as part of your monthly mortgage payment.
What Is a Mortgage Loan Calculator with Taxes and Insurance?
The mortgage loan calculator with taxes and insurance is a tool that can be used to determine what your monthly mortgage payments will be. These calculators will help you determine whether or not you can actually afford the monthly mortgage payment for the home you have decided to purchase.
Here are two popular mortgage calculators you can use to estimate your monthly mortgage payments:
Bankrate Monthly Mortgage Loan Calculator With Taxes and Insurance
U.S. Monthly Mortgage Loan Calculator with Taxes and Insurance
How Can I Fit My Monthly Mortgage Payments Into My Budget?
Making sure you can afford your monthly mortgage payments is something you will need to determine before you begin the home buying process. If you aren’t used to making a mortgage payment, which is in many cases higher than what you would pay in rent (but not always), you will need to find a way to make some small lifestyle changes to help ensure you can easily fit a mortgage payment into your budget. Now this sounds like the impossible task; however, you might be surprised at how easy this actually is once you’ve given it some thought.
Here are 10 ways to make a few lifestyle changes that will help you to easily fit a monthly mortgage payment into your budget.
1. Gather Your Monthly Bank Statements. You will begin by gathering a few of your monthly bank statements.
2. Examine Your Monthly Bank Statements for Waste. Take your bank statements and highlight all your wasteful spending habits.
3. Find Ways to Get Rid of Your Wasteful Spending Habits. Once you’ve identified your wasteful spending habits, you will then find ways to change them. For example, make your breakfast and lunch at home versus going through the drive through. Make your coffee at home versus grabbing a latte everyday and so on.
4. Trim Down Your Disposable Income. If you go out to dinner three times each week, try going out once or twice instead. If you like to socialize, why not invite your friends over to your new home versus frequenting the area hot spots and so on.
5. Find Ways to Save. Start cutting coupons, using rewards cards and actively seeking out discounts before you buy anything.
6. Switch to Lower Interest and No Fee Accounts. You can begin by only using credit cards that have low interest rates and talking with your bank and other financial institutions about no fee accounts.
7. Change Your Gift Giving Habits. If you usually purchase gifts for your friends and family, why not start giving them handmade gifts instead. Handmade gifts are heartfelt and are generally appreciated by all. You can get some great ideas and instructions from websites such as pinterest.com.
8. Implement a 30-Day Rule. When you want to buy something, force yourself to wait 30 days before making that purchase, unless it’s something you absolutely have to have. In many cases, after the 30-day waiting period, you will find you really didn’t need the item after all and therefore would have wasted your money had you bought it.
9. Examine Your Monthly Bills. Look at your monthly bills to see if there is any room to cut back. For example, raising or lowering your thermostat a few degrees can significantly lower your monthly bill. Could you take shorter showers? Do you really need 400 cable channels? If you really try, you can make a huge dent in your monthly spending by simply cutting back in a few areas.
10. Put 20 Percent Down On Your New Home. If you put 20 percent down on your new home, you could eliminate a somewhat significant amount off your monthly mortgage payments by not having to pay the PMI. You can easily do this by using the suggestions above to save for your down payment before you actually buy a home. Then you can continue these habits after you’ve purchased your home to take advantage of the continued savings.
2 Point Highlight
1. When buying a home, you will at some point need to determine if you can afford the monthly payment for the house you have chosen.
2. We would like to help you make sure you can afford your monthly mortgage payments.
