How to Calculate Mortgage Payments for a Home

You can calculate mortgage payments for your home with ease, so that you are sure of what to expect once you start paying off a mortgage. First of all, you need to know the monthly interest you will be paying on the loan. for this, you will need to know the interest rate and the term of the mortgage. For example if you are buying a home worth $300,000 and the interest rate is 2% and the repayment time is 20 years, the amount of money you will pay off as interest will be 2% of $300,000, which is $6000. For every year, it will be $300 and on a monthly basis, this will be $25 per month of $12.5 on a biweekly mortgage.

Second you need to know how much property taxes you will be paying on the home every year and divide whatever value you have by 12 to get the value of your property tax every month. Third, you need to know how much your homeowner's insurance will be on an annual basis and divide this value by 12 to get the total value of insurance you will pay on the property every month.

Fourth, you need to know the PMI. This can get rather tricky for those who do not have mortgage calculators. It is moderately easy to know your PMI value. First of all you need to determine your loan to value ratio (LTV). For this you will need to divide the value of the remaining principal with the value of the home. For some cases, you will need the home appraised to get this value. If the LTV is more than 80% it is a requirement for you to pay PMI.

You will pay off a certain percent depending on your LTV. Multiply this percentage value with the remaining principal balance to get what you will be paying as PMI every year. Divide this value by 12 to get the monthly payment of PMI. If you have been paying off your mortgage on a biweekly basis, you can divide this value by two to get the PMI value on every payment you will be paying to the bank.

These are the values you will need to add to your monthly mortgage payment to get the net value of your monthly mortgage payment. You can reduce this by cutting off your PMI by paying off 20% of the value of your home as down payment.

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