Monthly | Total | |
---|---|---|
Mortgage Payment | $2,626.57 | $472,782.39 |
Property Tax | $400.00 | $72,000.00 |
Home Insurance | $125.00 | $22,500.00 |
PMI Insurance | ||
HOA Fee | ||
Other costs | $333.33 | $60,000.00 |
Total Out-of-pocket | $3,484.90 | $627,282.39 |
House Price | $400,000.00 |
---|---|
Loan Amount | $320,000.00 |
Down Payment | $80,000.00 |
Total of Mortgage Payments | $472,782.39 |
Total Interest | $152,782.39 |
Mortgage Payoff Date |
# | Date | Beginning Balance | Interest | Principal | Ending balance |
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# | Date | No of Payments. | Beginning Balance | Interest | Principal | Ending balance |
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# | Date | Beginning Balance | Interest | Principal | Ending balance |
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# | Date | No of Payments. | Beginning Balance | Interest | Principal | Ending balance |
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The Mortgage Calculator helps estimate the monthly payment due along with other financial costs associated with mortgages. There are options to include extra payments or annual percentage increases of common mortgage-related expenses. The calculator is mainly intended for use by U.S. residents.
A mortgage is a loan secured by property, usually real estate property. Lenders define it as the money borrowed to pay for real estate. In essence, the lender helps the buyer pay the seller of a house, and the buyer agrees to repay the money borrowed over a period of time, usually 15 or 30 years in the U.S. Each month, a payment is made from buyer to lender. A portion of the monthly payment is called the principal, which is the original amount borrowed. The other portion is the interest, which is the cost paid to the lender for using the money. There may be an escrow account involved to cover the cost of property taxes and insurance. The buyer cannot be considered the full owner of the mortgaged property until the last monthly payment is made. In the U.S., the most common mortgage loan is the conventional 30-year fixed-interest loan, which represents 70% to 90% of all mortgages. Mortgages are how most people are able to own homes in the U.S.
A mortgage usually includes the following key components. These are also the basic components of a mortgage calculator.
Monthly mortgage payments usually comprise the bulk of the financial costs associated with owning a house, but there are other substantial costs to keep in mind. These costs are separated into two categories, recurring and non-recurring.
Most recurring costs persist throughout and beyond the life of a mortgage. They are a significant financial factor. Property taxes, home insurance, HOA fees, and other costs increase with time as a byproduct of inflation. In the calculator, the recurring costs are under the "Include Options Below" checkbox. There are also optional inputs within the calculator for annual percentage increases under "More Options." Using these can result in more accurate calculations.
Property taxes__a tax that property owners pay to governing authorities. In the U.S., property tax is usually managed by municipal or county governments. All 50 states impose taxes on property at the local level. The annual real estate tax in the U.S. varies by location; on average, Americans pay about 1.1% of their property's value as property tax each year.
Home insurance__an insurance policy that protects the owner from accidents that may happen to their real estate properties. Home insurance can also contain personal liability coverage, which protects against lawsuits involving injuries that occur on and off the property. The cost of home insurance varies according to factors such as location, condition of the property, and the coverage amount.
Private mortgage insurance (PMI)__protects the mortgage lender if the borrower is unable to repay the loan. In the U.S. specifically, if the down payment is less than 20% of the property's value, the lender will normally require the borrower to purchase PMI until the loan-to-value ratio (LTV) reaches 80% or 78%. PMI price varies according to factors such as down payment, size of the loan, and credit of the borrower. The annual cost typically ranges from 0.3% to 1.9% of the loan amount.
HOA fee__a fee imposed on the property owner by a homeowner's association (HOA), which is an organization that maintains and improves the property and environment of the neighborhoods within its purview. Condominiums, townhomes, and some single-family homes commonly require the payment of HOA fees. Annual HOA fees usually amount to less than one percent of the property value.
Other costs__includes utilities, home maintenance costs, and anything pertaining to the general upkeep of the property. It is common to spend 1% or more of the property value on annual maintenance alone.
These costs aren't addressed by the calculator, but they are still important to keep in mind.
Closing costs__the fees paid at the closing of a real estate transaction. These are not recurring fees, but they can be expensive. In the U.S., the closing cost on a mortgage can include an attorney fee, the title service cost, recording fee, survey fee, property transfer tax, brokerage commission, mortgage application fee, points, appraisal fee, inspection fee, home warranty, pre-paid home insurance, pro-rata property taxes, pro-rata homeowner association dues, pro-rata interest, and more. These costs typically fall on the buyer, but it is possible to negotiate a "credit" with the seller or the lender. It is not unusual for a buyer to pay about $10,000 in total closing costs on a $400,000 transaction.
Initial renovations__some buyers choose to renovate before moving in. Examples of renovations include changing the flooring, repainting the walls, updating the kitchen, or even overhauling the entire interior or exterior. While these expenses can add up quickly, renovation costs are optional, and owners may choose not to address renovation issues immediately.
Miscellaneous__new furniture, new appliances, and moving costs are typical non-recurring costs of a home purchase. This also includes repair costs.
In the early 20th century, buying a home involved saving up a large down payment. Borrowers would have to put 50% down, take out a three or five-year loan, then face a balloon payment at the end of the term. Only four in ten Americans could afford a home under such conditions. During the Great Depression, one-fourth of homeowners lost their homes. To remedy this situation, the government created the Federal Housing Administration (FHA) and Fannie Mae in the 1930s to bring liquidity, stability, and affordability to the mortgage market. Both entities helped to bring 30-year mortgages with more modest down payments and universal construction standards. These programs also helped returning soldiers finance a home after the end of World War II and sparked a construction boom in the following decades. Also, the FHA helped borrowers during harder times, such as the inflation crisis of the 1970s and the drop in energy prices in the 1980s. By 2001, the homeownership rate had reached a record level of 68.1%. Government involvement also helped during the 2008 financial crisis. The crisis forced a federal takeover of Fannie Mae as it lost billions amid massive defaults, though it returned to profitability by 2012. The FHA also offered further help amid the nationwide drop in real estate prices. It stepped in, claiming a higher percentage of mortgages amid backing by the Federal Reserve. This helped to stabilize the housing market by 2013. Today, both entities continue to actively insure millions of single-family homes and other residential properties.
Calculating exchange rates may seem simple on the surface, but it can be confusing to those that don't remember mathematics from school. While converting $100 to foreign currency when traveling isn't a big deal, converting currencies when analyzing a foreign stock's financial statements can mean big differences for international investors trying to make investment decisions.6 Let's look at an example of how to calculate exchange rates. Suppose that the EUR/USD exchange rate is 1.20 and you'd like to convert $100 U.S. dollars into Euros. To accomplish this, simply divide the $100 by 1.20 and the result is the number of euros that will be received: 83.33 in that case. Converting euros to U.S. dollars involves reversing that process by multiplying the number of Euros by 1.20 to get the number of U.S. dollars. An easy way to remember this is to multiple across left-to-right and divide across right-to-left, with the ending currency being the desired output of the calculation. In the example above, we divided across right-to-left to determine how many Euros we could purchase with U.S. dollars and then multiplied across left-to-right to see how many U.S. dollars we'd receive from euros. Travelers may only be interested in calculating to a relatively low degree of accuracy, such as cents, but currency traders that are highly leveraged pay attention to each pip. A small fluctuation in a currency can have a big impact for a trader that has borrowed $1,000 for each $1.00 committed to a trade or an international investor determining the impact of a $0.0001 difference on $1 billion in revenue.
Calculating exchange rates may seem simple on the surface, but it can be confusing to those that don't remember mathematics from school. While converting $100 to foreign currency when traveling isn't a big deal, converting currencies when analyzing a.... Read More
Calculators might look too simple on the hindsight, but if you come closer, you will see that you do require a little bit of technical knowledge to operate them properly, especially when the calculator in question is a scientific calculator of all. This makes it easier to stress more on important math concepts rather than stressing more on basic arithmetical calculations.
Calculators might look too simple on the hindsight, but if you come closer, you will see that you do require a little bit of technical knowledge to operate them properly, especially when the calculator in question is a scientific calculator of all..... Read More