304 North Cardinal St.
Dorchester Center, MA 02124
304 North Cardinal St.
Dorchester Center, MA 02124
Mortgage calculators have become useful tools for assessing your financial situation and capabilities before applying for a loan. However, they have certain disadvantages that mustn’t be overlooked and it is important to know what the most accurate mortgage calculator is.
There are many decent online calculators available, but I would like to single out the US Mortgage Calculator as the most accurate and accessible one. It offers the most detailed breakdown of your potential mortgage plan, the design of the website is user-friendly, and most importantly, it offers comprehensive guides for people who are not familiar with mortgage calculators.
US Mortgage Calculator is a great online tool, and much better than the majority of calculators available on the internet for one simple reason – it has features that most others don’t possess, and these features are exactly what increases the accuracy of calculations. Of course, all services are completely free.
Nowadays, all mortgage companies like Angel Oak, City Creek, or Charles Schwab and Rocket Mortgage have their own online calculators. However, they all work on the same principle that doesn’t bring the desired accuracy, and when it comes to mortgage issues, you want the most accurate results possible. Most of the calculators ask for the following information:
After entering this information, you will receive estimations of how much your monthly mortgage payment will be. However, this estimation often turns out to be highly inaccurate because the aforementioned elements are not the only factors that affect your payment. Unfortunately, even the most renowned companies like Zillow Bank of America have this problem, and the only way to get accurate calculations is to visit such companies in person and get an evaluation directly from one of their employees.
In order to get an accurate estimation for your mortgage plan, the following factors also have to be included when calculating:
Most calculators don’t have everything included. Although the price of utilities or maintenance fees doesn’t generally affect the final mortgage payment significantly, it can still result in a more than one thousand dollars difference which is by no means a small one. The US Mortgage Calculator has included all these fees into their algorithm, and it is up to you to do the research and have all the needed data in order to calculate everything precisely.
FHA (Federal Housing Administration) loans are the most popular due to having the lowest down payment rates and the overall affordability and flexibility. This calculator enables you to compute monthly or bi-weekly payments for the loan, taking into account all the mentioned factors. Here is what an FHA calculator includes:
|FHA Mortgage Details||This is the basic information for your loan. This section alone will give you a rough estimation of your mortgage plan. However, it is not an accurate calculation. Here you will have to type in your home value, interest rate, down payment, base mortgage amount, payment frequency, and amortization period.|
|FHA Mortgage Insurance||Here you will have to enter the fees concerning your Mortgage Insurance Premium (FHA-approved lenders all demand this insurance if the down payment is below 20%, as such loans are considered high-risk) and enter the duration of your insurance.|
|Homeowner Expenses||This section includes one-time expenses, annual property taxes, annual fees for homeowner’s insurance, and HOA fees (swimming pool or garden maintenance and other luxuries).|
|Extra Payments||Finally, after these three main sections, you will have the option to click on the “Extra Payments” menu. You will get extra fields where you can choose whether it is an annual, quarterly, monthly, bi-weekly, or one-time expense. Here you can add the price of utilities and other maintenance fees.|
On the other hand, DTI (debt-to-income ratio) are calculations that include your income, all current debts, and the loan you are applying for. In other words, DTI will give you a clear idea of your current financial power which will help you decide what loans are suitable for you. When computing DTI, the following information will be required:
|Monthly Housing Expense||Before calculating DTI, you have to perform the FHA calculations first because you will have to enter your monthly mortgage payments. In addition, property taxes, home and flood insurance, and HOA fees will also be required.|
|Monthly Debt Payments||These are your personal debts that will affect your financial power when applying for a loan. Minimum credit card payments, Auto loans or leases, student loans, and other monthly debts will have to be entered if you have them, of course.|
|Monthly Income||Finally, the most important factor that will determine your financial power is your monthly income. Fields that are available are gross wages, partner’s income, pension, self-employment income, alimony and child support, interest and rental income, and other sources of income.|
Once the FHA and DTI have been computed, you will have a much clearer picture of what loans you should look for. However, even though this is the most accurate calculator, it is still advisable to visit a professional mortgage broker and review the results.
The real estate market is quite volatile, meaning that interest rates and certain taxes can change for better or worse in a matter of hours. Hence, the most precise calculations are done by a professional mortgage broker who will use the current numbers taken from official sources. On the other hand, online calculators are not updated with each change, and that is a big disadvantage sometimes. The fluctuations are not always big, and they usually won’t affect the price much, but still, when it comes to the real estate business, precision is vital.
In order to get the right results, you need to know what you are doing, and the moderators have not disregarded people who are new to this process. Hence, if you are a student who wants a loan, all the necessary information will be available on the website. After you have entered the FHA or DTI interface, scroll below the calculator, and you will see detailed explanations of FHA and DTI and all the factors and elements that affect the final results.
Furthermore, after clicking the option “More” on the drop-down menu at the top of the screen, you will have the option “Mortgage Guide.” Here you will have access to a lot of articles that deal with various mortgage-related topics:
This is certainly a great addition, and it is highly recommended that you inform yourself first about the process and then start computing. Of course, the most reliable sources of information are good mortgage books and trustworthy brokers or real estate agents.
Another thing that most websites seem to get wrong is the design. On most websites, after you have done all calculations, flashy pie charts and graphs will appear. Although their function is to impart a sense of professionalism and seriousness, to a person who is new to everything they won’t mean much. Moreover, people tend to get confused by such complex imagery. However, the US Mortgage Calculator has kept the level of simplicity high. On the main DTI and FHA interfaces, there are just letters and numbers, and if you desire to see a graphic representation of results, the option needs to be selected.
Finally, to sum everything up, the general rule with all online calculators is that the more data they require, the more accurate they will be. Many companies offer such services, and as of recently, IT corporations like Google have also implemented this service. However, you have to be careful and take these results with a pinch of salt. Nonetheless, the US Mortgage Calculator has proved to be the most comprehensive one available, and we highly advise you to use this calculator if you have a need for it.