{"id":50227,"date":"2021-05-21T07:33:58","date_gmt":"2021-05-21T14:33:58","guid":{"rendered":"https:\/\/www.movoto.com\/blog\/?p=50227"},"modified":"2022-04-19T22:49:06","modified_gmt":"2022-04-20T05:49:06","slug":"5-things-you-can-learn-from-a-mortgage-affordability-calculator","status":"publish","type":"post","link":"https:\/\/www.movoto.com\/blog\/5-things-you-can-learn-from-a-mortgage-affordability-calculator\/","title":{"rendered":"5 things you can learn from a mortgage affordability calculator"},"content":{"rendered":"<h1>5 Things You Can Learn From a Mortgage Affordability Calculator<\/h1>\n<p>Using a <a href=\"https:\/\/www.movoto.com\/blog\/how-to-use-a-mortgage-payment-calculator\/\">mortgage affordability calculator<\/a> is a great way of identifying what you can afford and how much your home loan will cost you based on multiple variables. It provides a quick and detailed estimate of the loan\u2019s total cost and what your monthly payment will be.<\/p>\n<h3>What Goes Into a Mortgage Payment?<\/h3>\n<p>Your mortgage payment is made up of four main components; the principal is the amount loaned to you, the interest is a percentage fee you pay on top of your principal to borrow the money, the property taxes are a payment based on the value of the home, and your homeowner\u2019s insurance.<br \/>\nIf you\u2019re putting less than a <a href=\"https:\/\/www.movoto.com\/blog\/how-much-money-do-i-need-for-a-home-down-payment\/\">20% down payment on your home<\/a>, your lender will also require that you have private mortgage insurance (PMI), which covers the lender should you default on your loan.<br \/>\nWith a good mortgage affordability calculator, you can adapt these inputs to see how they impact your monthly payment \u2014 as well as the total cost of the loan over the 15 or 30-year term.<\/p>\n<h2>Five Reasons to Work With a Mortgage Affordability Calculator<\/h2>\n<h3>#1. Identify Your Price Range<\/h3>\n<p>You need to have a clear idea of what you can afford before starting your home search to ensure you\u2019re not shopping for properties that fall outside your budget.<br \/>\nWith a mortgage affordability calculator, you can quickly see how various price points translate to monthly payments, so you can narrow your range. A good follow-up step is to start working with a lender to get a <a href=\"https:\/\/www.movoto.com\/blog\/pre-approved-for-home-loan-mortgage\/\">preapproval letter<\/a>, which will show sellers that you\u2019ve initiated the mortgage process and that a lender has preapproved you for a specific loan amount.<\/p>\n<h3>#2. Understand Your Monthly Payment<\/h3>\n<p>Using a mortgage calculator also shows you what your <a href=\"https:\/\/www.movoto.com\/blog\/what-4-components-make-up-your-mortgage-loan-payment\/\">monthly payment<\/a> will be if you take out a loan under various terms. Having a clear picture of your potential monthly costs is valuable as it lets you understand the full scope of your financial future as a homeowner.<br \/>\nAs you start budgeting, you should also consider additional expenses associated with owning a home that are not included in a mortgage calculator, like closing costs, utilities, maintenance and upkeep, HOA fees, pest services, and landscaping or lawn care.<\/p>\n<h3>#3. See How Your Credit Score Impacts the Rate<\/h3>\n<p>An excellent mortgage calculator can also show you how your credit score will impact the rate and terms a lender offers. An FHA loan, for example, <a href=\"https:\/\/www.fha.com\/fha_loan_requirements\" rel=\"noopener noreferrer\">requires a credit score of 580 or higher<\/a> \u2014 but the interest rate and required down payment percentage will change based on your score. Based on the calculator\u2019s outputs, you may decide to <a href=\"https:\/\/www.movoto.com\/foundation\/improve-credit-score\/\">improve your credit<\/a> score before applying for a mortgage.<\/p>\n<h3>#4. Know How Interest Affects Your Loan Amount<\/h3>\n<p>Even a slight change in interest can make a significant difference in the total amount paid toward your mortgage over 30 years. For example, a buyer who purchases a home listed at the <a href=\"https:\/\/www.nar.realtor\/newsroom\/housing-market-reaches-record-high-home-price-and-gains-in-march\" rel=\"noopener noreferrer\">average price for existing single-family homes<\/a>, $334,500, <a href=\"https:\/\/www.movoto.com\/blog\/what-does-a-mortgage-down-payment-mean-what-is-pmi\/\">with 10% down<\/a> at the <a href=\"https:\/\/www.freddiemac.com\/pmms\/\" rel=\"noopener noreferrer\">current interest rate of 2.9%<\/a>, pays $150,055 total interest throughout the loan term. With last year\u2019s interest rate of 3.28% applied, the same loan conditions accumulated over $172,408 in total interest costs.<br \/>\nBy working with a mortgage affordability calculator you\u2019re able to identify the difference of cost resulting from a change in interest. This offers an excellent advantage when shopping for both lenders and <a href=\"https:\/\/www.movoto.com\/blog\/different-mortgage-loan-terms-mean\/\">loan terms<\/a>.<br \/>\nWith the <a href=\"https:\/\/www.movoto.com\/mortgages\/?utm_source=movoto&amp;utm_medium=blog&amp;utm_campaign=article_link\">Movoto mortgage calculator<\/a>, you can also compare interest rates from various lenders to see who has the best offerings in your area.<\/p>\n<h3>#5. Understand Your Refinance Options<\/h3>\n<p>Finally, a robust mortgage affordability calculator gives you the information you need to determine if it\u2019s the right time to refinance your home once you\u2019re an owner. Refinancing means taking out a new loan to pay off the existing mortgage. Homeowners typically do this to take advantage of better interest rates, cash out a part of their equity, or reduce their monthly payment with a longer repayment term.<br \/>\n<a href=\"https:\/\/www.movoto.com\/blog\/5-features-to-look-for-in-a-mortgage-payment-calculator\/\">A good calculator<\/a> will allow you to select \u201crefinance\u201d and input a few variables like the loan amount, property value, and term to view available loans from different lenders in your area.<\/p>\n<h3>Take the First Step Toward Your Home Loan<\/h3>\n<p>Take action today by working with a reliable, accurate, and detailed <span style=\"text-decoration: underline\"><strong>mortgage affordability calculator <a href=\"https:\/\/www.movoto.com\/mortgages\/?utm_source=movoto&amp;utm_medium=blog&amp;utm_campaign=article_link\">here<\/a><\/strong><\/span>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>5 Things You Can Learn From a Mortgage Affordability Calculator Using a mortgage affordability calculator is a great way of identifying what you can afford and how much your home loan will cost you based on multiple variables. It provides a quick and detailed estimate of the loan\u2019s total cost and what your monthly payment will be. What Goes Into a Mortgage Payment? Your mortgage payment is made up of four main components; the principal is the amount loaned to you, the interest is a percentage fee you pay on top of your principal to borrow the money, the property [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":50228,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[167,63,227],"tags":[136,80,49,172,75,79,111,179,182,85,86,87],"class_list":["post-50227","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-basics","category-finance","category-mortgage","tag-affordability","tag-buyer-tips","tag-buying-a-home","tag-credit-score","tag-fha-loan","tag-homes-for-sale","tag-mortgage","tag-mortgage-application","tag-mortgage-calculator","tag-mortgage-loan","tag-mortgage-rates","tag-refinance","post--single"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.1.1 - 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