# Mortgage Calculator

Before finally taking the life-changing action of closing on your home, you want to be absolutely sure that you can afford that house and the mortgage that will finance the purchase.

And the best way to ensure you can afford your home is by using True Quote Mortgage’s mortgage calculator. After plugging in a few key data-points, like the value of a prospective home, the size of your down payment, and the estimated interest rate, the mortgage calculator will determine what your monthly mortgage payment will look like.

With a good idea of what your recurring mortgage payment will be, it will be up to you to decide if that monthly financial commitment can comfortably fit into your budget.

Depending on the term length of your mortgage, your home loan payments will come each month without fail for likely more than a decade. This is why it is absolutely imperative to confirm your monthly mortgage payment is something you can easily budget for, even when also allotting funds for other monthly payments, like those made on credit cards or student loans.

If you agree to mortgage terms with payments that will eventually burn through your bank account, you run the risk of falling victim to foreclosure.

Below, you will find the True Quote Mortgage mortgage calculator that you can utilize to estimate monthly payments for your home loan based on your unique situation. In addition to that tool, you can also learn more about the formula used to calculate mortgage payments and what costs are associated with your mortgage.

## Calculating Your Mortgage Loan Payments

Believe it or not, there is an actual set formula that you can use to calculate what your monthly home loan payments will look like. If you have an inkling for mathematics, the formula looks like this:

M = P[r(1+r)^n/((1+r)^n)-1)]

So, what does that mean? Even though the mortgage payment calculator found below automates this calculation for you, it is important to at least get a good feel for what factors are determining the estimated mortgage payment that comes from our mortgage calculator.

The letters in the aforementioned formula mean the following:

• M: Your monthly mortgage payment
• P: The principal balance, or entire loan amount, of your home loan
• r: Your monthly interest rate that you will have to pay on your mortgage. A lender will provide your annual interest rate, so all you have to do is divide that annual figure by 12 to get your monthly interest rate for your mortgage loan.
• n: The number of payments that you will have to make over the entire life of the home loan. To get this figure, simply multiply the number of years associated with your mortgage loan term by 12; the resulting figure is the number of payments you will have to meet.

## Considering Other Costs Associated With Your House and Mortgage

Having a feel of what your recurring monthly mortgage payments will be can help you better understand how much house you can afford. With that being said, there are also going to be other costs that come with being a homeowner that you must consider.

When you finally achieve the momentous financial milestone of closing on your mortgage and becoming a homeowner, you will run into the following additional costs:

• Property and Transfer Taxes: Two different taxes you will have to pay. The former is a prorated amount of the property taxes that you will have to pay to the sellers, while the latter come with the official transferring of the property and recording the deed. Transfer taxes are applicable in most states.
• Mortgage Origination Costs: This includes fees for a credit check and possibly other application or origination fees depending on the mortgage loan lender.
• Title Insurance: These are costs linked to a title search to confirm there are no liens or encumbrances on the home.
• Appraisal, Survey, & Inspection Costs: Mortgage lenders will require an appraisal to valuate the home, while inspections ensure the home is safe, and surveys will set the property boundaries.

And, on top of these aforementioned costs that come with closing on your mortgage, there are other expenses you must budget for other than the principal balance and interest. A few of these additional expenses include:

• Private Mortgage Insurance (PMI): If you are unable to make a down payment that is 20% of your home’s value, than you will almost certainly have to pay PMI to mitigate the mortgage lender’s risk.
• Property Taxes: You will almost always have to pay local property taxes no matter where you live in the United States.
• Homeowner’s Insurance: Although the mortgage loan lender will probably require it anyway, it is sound financial idea to have homeowner’s insurance to ensure your home is protected.
• Homeowner’s Association Fees: Depending on if you live in a building or complex, you may get charged monthly fees to pay for communal spaces.

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