Property tax: The county where the home is located will dictate your property tax percentage.For example if your loan amount is $300,000, and your interest rate is 5.5%, you would pay $16,500 in interest for the first year (0.055 x 300,000 = 16,500). Interest rate: This is the annual rate your lender charges for borrowing the loan.For example, if you purchase a $300,000 house and put down 10%, your principal would be $270,000. Principal: This is the amount you owe on your mortgage minus the down payment you made.Here’s a breakdown of key factors that affect your monthly mortgage payment: Increase your down payment: If you can make a higher down payment than what is required, this can be a good way to lower your monthly mortgage payment.If your credit score is low, it might be a good idea to work on improving your score before applying for a home loan. Work on your credit score: Homebuyers with excellent credit scores are typically offered the best mortgage terms.Shop interest rates: It’s important to compare different lenders and loan types to have the best chance in securing a low interest rate.This may mean lowering your home purchase budget and finding a home in need of improvements. Adjust your homebuying budget: If your monthly mortgage payment is too high, you may want to reconsider how much you can actually afford.However, you will pay more interest since it is a longer loan term. Lengthen the term of the loan: If you plan to live in the home for a while, extending your loan term from 15 years to 30 years can help lower your monthly payment.If you calculate your monthly mortgage payment and it is not as low as you hoped for, there are a few ways you can lower it: How to Lower Your Monthly Mortgage Payment These are both important factors in determining your monthly mortgage payment, so we recommend including them if possible. Advanced settings: The advanced settings allow you to include property taxes and homeowners insurance in your calculation.Loan type: Select whether you are interested in a purchase loan, or a refinance loan.Credit score: This is a measure of your creditworthiness and is used to determine your interest rate.Loan term: The length of time, in years, that you'll be making payments on your loan.Interest rate: This is the annual interest rate on your loan.Down payment: The amount of money you're putting down upfront towards the purchase of your home.Home value: The estimated market value of the home you're interested in buying.Here’s a closer look at each component of the mortgage calculator: You can also select whether you want to include property taxes and homeowners insurance in your calculation. To use our mortgage calculator, enter your home value, down payment, interest rate, loan term and credit score. CNN Sans ™ & © 2016 Cable News Network.How to Calculate Your Estimated Monthly Mortgage Payment Market holidays and trading hours provided by Copp Clark Limited. All content of the Dow Jones branded indices Copyright S&P Dow Jones Indices LLC and/or its affiliates. Standard & Poor’s and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Chicago Mercantile: Certain market data is the property of Chicago Mercantile Exchange Inc. US market indices are shown in real time, except for the S&P 500 which is refreshed every two minutes. Your CNN account Log in to your CNN account This calculator can help you determine what your monthly payments will be, based on how much money you plan to borrow for your home purchase. And don’t forget to consider additional costs associated with owning a home, such as utilities, taxes, maintenance, which will add to your monthly costs. A middle-ground recommendation says you shouldn’t put more than 28% of your monthly gross income toward your mortgage payment. Other models are more conservative and suggest 25%, in order to keep your debt-to-income ratio lower. Most experts recommend that your monthly mortgage payment should not exceed 35% of your gross income. Each payment includes a portion that goes toward the mortgage principle, and another portion that goes toward interest charged by the lender. A mortgage is a home loan that is usually paid back in fixed amounts over a period of time – typically 15 or 30 years. Looking to buy a home? It’s important to take out a mortgage that you can reasonably afford. Enter your details below to figure out what you might pay each month. Accurately calculating your monthly mortgage payment can be a critical first step when determining your budget.
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