One of the most important factors to consider when buying a new Pittsburg CA home is
affordability. As a general rule, mortgage payments should not exceed 25-
30 percent of your monthly take-home pay. The best way to know what you
can afford is to determine the possible payment range by comparing the
price of the home with other essential ingredients.
Figure Out How Much You Want To Borrow
Your first step to calculating your monthly mortgage payment is knowing how
much you want to borrow. This can be determined by subtracting your down
payment amount from the purchase price of the home, which will give you
the amount that you will need to request from a lender.
Know Your Rates
The next step is to determine the current interest rates for the purchase of a
home. Rates vary and may change often, so check with your lender for
current rates. Itâ€™s worth noting that the interest rates you receive will, in
part, be based on your credit history. This means that knowing your FICO
score and credit rating will give you a good idea as to how your interest rates
will be calculated.
Choose Your Loan Term
Your monthly mortgage payments will be determined by a number of factors,
including the term of your loan. If you were to borrow $250,000, your
monthly payments would be less with a 30-year mortgage than with a 15-
year mortgage. The reason is because it would take larger monthly
payments to get the loan paid off quicker, which is why you will need to
select a loan term before calculating your payments.
Additional Costs To Consider
Your total mortgage payment will include taxes, homeownerâ€™s insurance and
possibly even private mortgage insurance (PMI) if you provide less than 20
percent down and your loan requires it.
Just The Facts & Figures
Now that you know how much you need to borrow, have chosen your loan
term and are familiar with the current interest rates, itâ€™s time to calculate
your payment. Most lenders offer a mortgage calculator on their Web site or
you can get an estimate by speaking with your lender.
If you still need help in calculating your potential monthly mortgage
payments, donâ€™t hesitate to ask us, mortgage broker or lender.