PITI Mortgage Calculator | Estimate Mortgage Payment – Bankrate.com

December 25, 2021 By admin

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Use this PITI calculator to calculate your estimated mortgage payment. PITI is an acronym that stands for principal, interest, taxes and insurance. After inputting the cost of your annual property taxes and home insurance costs, you’ll see the full impact of your monthly payment on your household budget.

Fill in the blanks and hit “view report” to see the payment schedule, which shows how much of your payment goes toward interest, and how much toward principal. Because the amount of interest is determined by the balance owed, over time the interest remitted with each payment decreases, with more of your monthly payment going toward principal.
The total monthly cost of a mortgage is comprised of more than just the principal and interest. Property taxes, homeowners insurance and mortgage insurance (if you put less than 20 percent down on the property) can be lumped into the monthly payment as well. HOA fees, though part of the monthly cost of homeownership, are often paid separately.
There are numerous ways to lower your mortgage payment. Using a mortgage payment calculator can help you figure out which method is right for you.Here are a few ways in which you can lower your mortgage payment:

  • Increase your down payment. The less you owe on a home, the lower your monthly mortgage payment will be. Using the mortgage calculator, decrease the mortgage amount to see what it does to your monthly payment.
  • Put at least 20 percent down. Lenders typically require you to have private mortgage insurance if you put less than 20 percent down on a home, which will bump up the amount you pay each month.
  • Lengthen your loan term. You can lower your mortgage payment by increasing your loan term. In turn, you’ll pay more in interest over the life of the loan. Use the mortgage calculator to experiment with various term scenarios ­— pay attention to what it does to your monthly payment and total interest.
  • Shop around for interest rates. Finding the lowest interest rate possible will not only lower your monthly payments, it can significantly reduce the interest you pay over the life of the loan. Get quotes from multiple lenders in order to improve your chances of finding a great rate.
  • Refinance your home. If you already have a mortgage, shopping for a new one, especially when rates are low, can significantly lower your monthly mortgage payment. When refinancing, extending the term of your mortgage, finding a lower rate or paying down some of the principal balance of your overall mortgage can all play a part in lowering your mortgage payment.

If you have a fixed-rate mortgage, your principal and interest payments won’t rise. However, property taxes and homeowners insurance premiums tend to increase over time, which can boost the monthly cost of your mortgage. Other expenses, like HOA fees, can also increase and impact how much you pay on a monthly basis. You could also see your monthly payment climb if you have an adjustable-rate mortgage.
Interest rates affect how much home you can afford. The higher your interest rates, the higher your monthly mortgage payment and the more interest you’ll pay over the life of a loan.
The term you choose depends heavily on what your budget allows and personal preference. Generally, longer loan terms come with lower monthly payments, allowing for more cash flow but costing more in interest over the life of the loan. Shorter loan terms generally come with higher monthly payments than longer-term loans of the same amount, but they can be a good option for those who have sufficient cash flow and want to pay off their mortgage faster with less interest. Choose the term that best fits your financial situation and goals.
Down payments have a big impact on the type of loan you can get, the cost of the loan and the interest rate you receive. Many lenders and loan types require that you make a down payment of at least 5 percent. Yet some conventional loans allow for down payments as low as 3 percent. FHA loans allow you to make a down payment of just 3.5 percent, and VA loans often don’t require a down payment at all. However, the best way to keep costs low is to put down at least 20 percent. Doing so will keep you from paying private mortgage insurance and significantly lower your monthly payment. To figure out how much you can realistically put down on a home, the Consumer Financial Protection Bureau suggests adding up your total available funds and then deducting moving costs, renovations, outside savings goals and your emergency fund. After that, subtract your estimated closing costs from your total available funds—closing costs are generally 2 to 5 percent of the home purchase price—to determine your maximum down payment amount.
You’ll need to factor closing costs into the overall price of your loan. According to Bankrate’s 2017 Closing Costs Survey, U.S. homebuyers pay an average of $2,084 in origination and third-party fees. These costs vary by location, with states like New York and Hawaii bringing up the national average. Broadly speaking, however, closing costs range from 2 percent to 5 percent of the purchase price of a home.
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