Looking for a home? Use a mortgage loan calculator!

Lennox_MortgageWith the real estate market beginning to see signs of bottoming, it may be time to start looking for a new home or an investment property.  Because of that, I want to show you a website where you can figure out your loan payments with their mortgage loan calculator.

First, let’s talk about what a real estate bottom means.  Real estate, just like everything having to do with the economy, moves in cycles.  While economic downturns are scary and affect people in a real and sometimes debilitating ways, they are part of the normal cycle of our economy.  When the economy is down, you can expect that it will go back up.

What investors look at in these cycles is the bottom.  The bottom, as the name implies, is the absolute lowest value an investment vehicle hits before it starts to go back up in value.  The closer to the bottom you can buy, the more money you stand to make.  Use the mortgage loan calculator at Yahoo! Real Estate to see if you can afford that property if you think your area is at the bottom of the real estate value cycle.

Remember that no matter what your motives are for purchasing a home, it is an investment and should be bought at the appropriate time in the cycle.  Let’s take a look at the Yahoo! Real Estate mortgage loan calculator.  You can find it by clicking here.

In order to get an accurate payment amount you have to fill in all of the fields.  The loan amount is the total amount that you will borrow for your home.  That is different than the selling price.  The interest rate will come from your loan company but if you want to get an average rate, look in your newspaper or online for the average rate being paid in your area. 

Number of years is normally 30 years and you want to look at a yearly amortization table.  (This table simply tells you how much of your payment is going to interest versus principal.  It’s depressing to look at, to be honest)

The property taxes can be found by calling the local city government office or asking your real estate agent if it is on the MLS listing.  Your mortgage loan calculator is almost ready to calculate.

Hazard Insurance is going to depend on the value of your home plus any additional coverage you want.  It is suggested that you get a quote before making a decision on whether to purchase the home.  This can easily be done online.

Unless your down payment is at least 20% of your home’s value, you are going to pay PMI.  Bankrate.com says this:

Let’s say you put down 10 percent or $10,000 on a $100,000 house. The lender multiplies the 90 percent loan, or $90,000, by .005. The result is an annual PMI of $450, which is divided into monthly payments of $37.50.

Now,  your mortgage loan calculator is ready so do the calculation and see what comes up.  If you can afford it, take the next step!

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