However, buying in the long term is MUCH better. Extend that same circumstance out over 15 years and you'll see a big difference for a few reasons. Look at the amortization schedule again and see that during the 12th year the principal is now $325.00, PLUS you bought the condo and no longer have to deal with inflation (as long as you get the fixed rate mortgage instead of the ARM Rate!). If you were renting over those 15 years your rent would have gone up close to 10% a year and you will have missed out on all that appreciation. Now take a look at how much you owe after those 15 years, $104,000! You already paid down $46,000 in principal and now the principal is much higher in each payment.

So after you put in the 120,000 and the fixed interest rate it will ask you what amount of years you'd like to finance over. This is also very important, as I explain on my website, because if you shop about 20% lower in price and get the 20 year mortgage instead of the 30 year then you will pay it down 10 years faster! The payment will also be less so you can add money to the principal each month which will save you an incredible amount in interest. Take a look at how much you'll save using a mortgage calculator by adding $100 to your principal each month. You'll be amazed!

You may also want to consider changes in other aspects too. For example, if you can extend the loan terms for a longer period than you have them listed, you can usually gain by lowering your interest rate as well as stretching payments longer. This can help you to lower the monthly payment of the home. Or, if the amount is too low but you don't like how much interest you are paying, go back to the amortization calculator and shorten the terms. This will cut the amount you are paying considerably in interest and raise the monthly payment.

Interest Calculator First you plug in the mortgage amount after the down payment amount. So if you're buying a home for 150,000 and your down payment is 30,000 you should put 120,000. Then the interest rate is a very big deal because there are many different types of mortgage loans available. Each type of loan will also have a different interest rate as well. So you should check the lowest and highest to make sure you can afford the monthly payment.

Enter the interest rate. The interest on loan is the percentage of money which the lender charges the borrower. Depending on the state of the economy, the quality of a person's credit history and who is supplying the loan, the interest rate varies. The longer the loan lasts, the more money is paid in interest to the lender.

Your debt to income ratio is very easy to figure out. The bank will approve you for about 40% of your gross monthly income in this economy. So take your average gross in come over the last two years and homepage divide it into months. Less say you average income was $70,000 divided by 12 months equals about $5,800.00. The bank will allow you to use about 40% of that which is $2300.00. Then you have to subtract all of your monthly loans. Any car loan, mortgage loan, student loans and insurance. All of the house expenses are factored in by the bank so you don't have to include that.

However, once the 5 years is up you get all the 30 years worth of principal squeezed into the 25 years that you have left on your mortgage. Plus, it's an adjustable rate and who knows what will happen to interest rates in 5 years. So you'll have to add principal and adjust your interest rate to almost double your mortgage payment for the next 25 years.

Homeowners insurance is a requirement by lenders and can vary by coverage, providers, regions and particulars of the home and surrounding area. I usually estimate using a percentage of value and a conservative percentage to use for a base policy (no flood no earthquake) would be 0.40% of the purchase price per year or about $83 a month in this case. (0.40% x 250,000 = $1,000 / 12 months $83.00).

You can also use a calculator homepage (https://connects.ctschicago.edu/forums/users/112361/) if you want to refinance your existing loan. You can plug in different numbers and see what the results are. This can help you negotiate for the payment you can afford.