Tips on Estimating the Cost of a Mortgage

Peoples Home Equity knows there are a lot of prospective home buyers in America that have not been approved for a mortgage yet. Perhaps the person or family does not have their credit score at a satisfactory level to obtain a loan. However, if one has ever wondered what it would cost to purchase a home, Peoples Home Equity’s online calculators can satisfy one’s curiosity
The follow are a few tips on how to estimate the cost of a home:
Find out how much money can be borrowed
First, the prospect must find out how much money can be borrowed, this can be easily estimated using Peoples Home Equity’s “How Much Can I Borrow” calculator. For example, a family applying for a 30-year fixed rate loan at a 5% interest rate, with $80,000 household income, $3,000 property taxes, and $1,500 in monthly debt obligations, is estimated to be allowed to borrow as much as $116,000. Borrowing ability varies mostly due to the annual gross income and the monthly debt expenses of the applicant.
Find out the income level needed to borrow the desired amount.
Perhaps the estimated borrowing amount was not enough to purchase a desired home at its listing price. In this case, the user can use Peoples Home Equity’s “How Much Do I Have To Earn?” calculator. For example, perhaps the prospective mortgage applicant needs $150,000 instead of the estimated $116,000. In this case an income level of $85,174 is required. Otherwise, monthly debt obligations need to be cut from $1,500/month to just $1,350. One way may be easier than others, but prospects should maximize their income and cut expenses during a year when they plan to apply for a mortgage, it bodes confidence to the lender.
Find out how much the mortgage will cost
If the applicant is confident he or she has the necessary income/expense ratio to get approved for a home loan then they estimate how much a mortgage will cost per month. Peoples Home Equity’s “Monthly Payment Calculator” does just that. For example a $150,000 30-year fixed rate home loan just 5% interest, will cost $805.23/month. Remember, we have been using a 5% interest rate throughout this release, however 30-year fixed rates are currently much lower at 4%, this would equate to a $716/month monthly payment.
Apart from these major factors when considering the cost of a mortgage, Peoples Home Equity offers many other online calculators for the curious. These tools include: “Additional Payment Calculator” to estimate ways to cut the duration of mortgage payments, “Interest Only Monthly Calculator” and “How Much Will My Tax Deduction Be?”.
If in need of a mortgage, contact a Peoples Home Equity loan officer today at: 262-563-4026