Use our home loan calculator to quickly estimate your monthly payment for a Purchase or Refinance Loan including your principal and interest, taxes, and insurance in California.
Why Should I Use A Home Loan Calculator?
Why should you use a home loan calculator? Early in the planning stages of your new home loan you will want an estimate of your monthly mortgage payments before you commit to buying the home.
Having an estimate will help you plan and save for your home loan including crucial areas like planning for your down payment and closing costs.
Some home loan applicants overlook crucial details when trying to calculate their monthly mortgage payment–usually because they aren’t familiar with all the factors that go into calculating that payment, as we’ll explore below. It’s not just your principal loan balance and the interest charged on it.
Using a home loan calculator eliminates a margin of error in this respect since you’re required to enter all the variables needed to calculate your estimate. What kind of variables?
Buying a home means paying certain up-front fees, and there are also costs that can be paid by the seller (you will have to negotiate to do that with the seller, it’s not automatic), and you will also have to factor in your mortgage insurance premium into the calculation.
There is, for certain government-backed mortgages, an Up-Front Mortgage Insurance Premium (UFMIP) and there are monthly premiums. If you pay UFMIP in cash at closing, only the monthly mortgage insurance premium factors into your home loan calculations.
But if you choose to finance the UFMIP, that will increase your loan amount and potentially raise your monthly mortgage payments.
Conventional loans don’t have UFMIP, but usually require mortgage insurance unless a 20% down payment is made or the home reaches 20% equity. VA mortgages have no VA-required mortgage insurance mandate.
To use the mortgage calculator, you’ll need to gather some information starting with a sale price of the property. Those who are not in the house hunting phase of their home loan journey yet should try estimating what might be affordable. Run the numbers, and make adjustments from there until you find the right price range for your budget.
You will also need numbers for the following, which you’ll enter into the appropriate field on the mortgage calculator:
- Down Payment
- Loan term (15 or 30 years)
- Interest Rate
- Property Tax
- Homeowners Insurance
- HOA Dues
Typical loan terms run between 15 and 30 years and the amount of money you pay in interest will change depending on how long or short your loan is.
When trying to determine the interest rate, it’s a good idea to be conservative–give yourself a middle of the road interest rate (not the lowest rate advertised) and be sure to ask a lender what might be considered realistic for home loan planning purposes if you aren’t sure.
How to Estimate Orange County Property Taxes
The base property tax rate in Orange County, CA is 1%. Each area of Orange County can have additional taxes for bonds and local measures that are passed. 1.5% of the purchase price is generally a good property tax estimate to use.
Orange County Homeowner’s Insurance
There are many factors that influence the cost of home insurance. Here are some of the major factors that affect insurance costs: location, home price, home’s age and condition, credit history, amount and type of coverage, security features, insurance provider and insurance bundling. Earthquake damage generally won’t be covered by a standard homeowners policy in California but can can be purchased as an endorsement (an addendum) for an additional fee.
Mortgage Calculators For Refinance Loans
You can also use a mortgage calculator to estimate your monthly mortgage payment for a refinance option, but there are variables depending on the type of refinance you seek. Cash-out refinance loans require appraisals and credit checks which are costs typically NOT rolled into the loan amount.
But your mortgage insurance issues will be a factor as well as the term of your new loan. Are you going for a shorter loan term or the same loan term as the original mortgage?
That alone may affect the variables that go into your calculation. For example, you may be offered a lower mortgage loan interest rate on a 15-year mortgage than a 30 year one, depending on circumstances.
How Are Mortgage Payments Calculated?
Your mortgage payments are determined when you add all the monthly expenses associated with your mortgage loan (see above) together including interest and dividing by the number of payments required.
The following variables need to be included in your mortgage payment calculation:
- Principal balance
- Interest rate
- Loan term
- Property taxes
- Any add-ons to the loan such as Energy-Efficient Mortgage funds, etc.
- Any applicable Homeowners Association or Condo Owners Association fees
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