Q. Dear LoanSafe.org, My husband and I have just recently sold our home and are looking for another place to live. However, we are having difficulties figuring out exactly how much we can afford and have yet to consult with a local real estate agent about the matter. We are looking to do some research on our own so we can have a good idea of what exactly we are looking for.

Our question to you is, “How do I calculate monthly mortgage payments?”

The perfect mortgage has to have the right monthly payment that fits your particular financial situation. If you are looking to figure out how much of a loan you can afford, and what the monthly payments will be, it would be wise to use our free online mortgage calculator. This tool is one of the simplest ways to get a quick and easy estimate of how much you can afford.

Mortgage calculators will help determine your potential new monthly payment by computing all the information related to the mortgage loan and the property itself. It will also take into consideration other factors that are included such as property taxes and insurance information. Input this information and you will receive a quick estimate that will help you decide whether or not the loan fits your budget.

The online mortgage calculator has got to be one of the easiest ones to use. When first getting started you will need to input the loan amount, interest rate, length of term, and the homes value. The loan amount consists of how much you are looking to borrower, the interest rate is the current rate being offered by the lender, the length of term is the amount of time it will take to repay the debt in full (typically 15 or 30 years), and the home value is the current price of the property.

Once you have calculated this information you will be asked to input three more fields including annual property taxes, annual insurance, and annual PMI (private mortgage insurance). However, when using this calculator you will want to keep a close on the interest rate and the length of term. Generally, the lower the interest rate, the lower the monthly payments will be. Depending on the size of the loan will determine just how much a lower interest rate will help decrease your monthly payment.

If you happen to choose a loan with a short term such as a fifteen-year mortgage, then you can expect the monthly payments to be much higher. The longer the loan is amortized over, the lower the monthly dues will be.

I definitely would suggest looking for a thirty-year fixed rate mortgage as this may be the easiest to pay off. Also make sure to shop around various lenders because different lenders may be offering lower interest rates than others. Remember the lower the interest rate, the lower your monthly payments will be.

You can also join our mortgage forum with over 32,000 Americans who are helping one another with their home loans. There is a tremendous amount of information and free help there.

Good luck!

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