How to Calculate Mortgage Loans

Some people experience problems repaying their mortgages due to lack of knowledge and understanding of the terms of their mortgages. It's not smart to simply take the word of the loan originator rather than investigating mortgage terms on your own. Don't make that mistake—ask questions, gain knowledge about mortgages and perform your own calculations to get the best loan possible. One basic calculation you should start with is determining how much a prospective mortgage will cost you each month. Online mortgage tools make this a snap.

Determine your mortgage loan using the Corcoran calculator (see Resources). This calculator displays the mortgage payment for your intended loan. Just enter your term, rate, the price and the percentage you plan to put down on the mortgage. You can also view an amortization schedule listing the breakdown of each payment in terms of principal and interest.

Use the ML Calc mortgage calculator as another option. In addition to your mortgage payment, the calculator (see Resources) also allows you to estimate the amount you'll pay each month for real estate taxes and insurance, which is often called your "escrow." If you think you'll have to pay PMI (private mortgage insurance), which is often required when you put less than 20 percent down, you can also estimate that into your monthly mortgage payments as well.

Calculate the terms of your mortgage loan using the calculation tool at the Mortgage 101 website (see Resources). Enter everything you know about the loan, including possible additional costs, taxes and insurance and press "Calculate" to view a comprehensive report about the loan. The report lists your mortgage payment, including all additional escrow payments and the amount you'll have to pay at closing.

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