If you’re getting ready to buy a new home for the first time, you may already be aware that the first-time home buying journey can be pretty exciting, but it also requires you to answer a lot of unfamiliar questions. One of those questions may be, “How do you calculate your mortgage?”
How To Calculate Your Mortgage?
Calculating your mortgage is simply a matter of estimating how much you’ll pay each month, depending on the amount that you financed. That sounds easy enough, but the math can be kind of a chore, so it’s a lot easier if you use an online mortgage calculator to help! Just enter the amount you’ll be borrowing, the mortgage term, and the latest interest rate from your lender and voila! you have an estimated monthly mortgage payment.
For many, the cost of even a very affordable home is more than most can pay in one lump sum, so getting a mortgage is necessary. That means you’ll be making mortgage payments every month until the house is paid off.
If you’ve begun the process of looking at houses for sale and visiting neighborhoods, it’s also time to start gathering your financial information so that you’re prepared to talk to a mortgage lender and figure out how much of a mortgage you can afford. That’s where an online mortgage calculator can really come in handy!
What you need to calculate your mortgage payments:
- First, you’ll need to know your principal mortgage amount. That’s simply how much you’ll be borrowing for the mortgage: the price of your new home less than your down payment. Most lenders encourage (and some even require) a down payment of around 20% of the total price of the house.
- Then you’ll need to know the annual or monthly interest rate. Luckily for first-time homebuyers in Texas, mortgage rates have been at historical lows since 2008. However, interest rates fluctuate with the economy, are impacted by the borrower’s credit score, and are different all the time, so be sure to ask your lender about the most current rates.
- Finally, you’ll need to know the loan term in months. Most mortgages are either 30-year fixed or 15-year fixed, which would be 360 months or 180 months, respectively.
Important Note: For most American homeowners, a monthly payment will also include homeowner’s insurance and property taxes, so be prepared to figure that into your monthly total.
Mortgages in Austin, Texas
Shopping for a mortgage? If you’re looking for a new mortgage in Austin, Texas, you’ll want to begin by compiling a list of potential lenders and asking plenty of questions about your mortgage options. This includes asking about possible lender fees or whether they have minimum mortgage requirements. Some lenders require a minimum down payment, for example.
Whatever lender you choose, never hesitate to ask questions and be sure that you understand the entire mortgage calculation process before you sign. After all, you’re looking at borrowing a sizable amount of money, not to mention buying what will become your family’s new home, so you’ll want to be sure that you’re comfortable before you take the plunge.
Santa Rita Ranch’s Mortgage Calculator
Here at Santa Rita Ranch, we hope that you’re considering our master-planned community for your family’s new home! To make your decision as easy as possible, visit our Mortgage Calculator page or our New Homes search page to help find the home of your dreams! We’re located in the fastest growing corridor of Northwest Austin, in Liberty Hill, Texas, and we’d love to have you as a resident and a neighbor!