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# Mortgage Calculator

Using our mortgage calculator allows you to understand what your principle and interest payment will look like. Our loan specialists are ready to assist you when you are ready. If you are unsure what type of rate you might get for your new home loan, feel free to contact us. We are here to help, after asking a few questions our loan specialists can give you a pretty good idea of where the rates would be for you. We are brokers and have multiple lenders to find the perfect rate for your circumstance.

### The math behind mortgage payments

If you want to learn how to figure out how much your mortgage payment will be, and are mathematically inclined, here is a formula to let you calculate your mortgage payment.

M = P[r(1+r)^n/((1+r)^n)-1)]

• M = the total monthly mortgage payment.
• P = the principal loan amount.
• r = your monthly interest rate. Lenders will provide an annual rate so you will need to divide that rate by 12 to get the monthly rate. For example, if your APR is 5%, your monthly rate would be 0.004167 (0.05/12=0.004167)
• n = number of payment to satisfy the loan. Multiple the number of years for your mortgage by 12 to get the number of monthly payments for your loan. For example, a 30-year fixed mortgage would have 360 payments. (30×12=360)

The formula above can help you crunch numbers to see how much house you can afford. Using Homewise’s tool to calculate your mortgage payments can make it easier to decide if you’re putting enough money down or if you need to adjust your loan term. It is typically a good idea to rate shop with multiple lenders, however since Homewise is a brokerage that has several lenders, we will query all of our lenders to ensure that you are afforded the best possible interest rate and the lowest possible monthly mortgage payment.

### Use a mortgage calculator to help

Buying a home is often times life’s largest transaction, and how you finance it should not be a snap decision. You should set a budget up front to ensure that your new mortgage payment will not push your debt-to-income (DTI) ratio in a range that you are not comfortable. This budget should be set long before you start to look at houses. Once you know how much you are comfortable with spending, you can work with Homewise’s mortgage calculator to adjust sales price, down payment, and loan term in order to get your monthly mortgage payment where you want it to be. Contact one of our loan specialists, or fill out our online application, to find out what the current interest rates are.

### How to decide how much house you can afford

If you are unsure about how much of your income should go towards housine, you should follow the 28/36 percent rule. Most financial experts agree that you should spend no more than 28% of your gross income on housing, and no more than 36% of your gross income on total debt (mortgage payments, credit cards, student loans, medical bills, car payments, etc.)

### What’s Next

A mortgage calculator is only meant as a self help tool to help you estimate your monthly mortgage payment and understand what it includes. The next step after playing with the numbers is to get you preapproved for a mortgage loan.

Applying for a mortgage with Homewise Financial is a simple online process, that will give you more definitive numbers and a better idea of how much house you can afford. You’ll also have a clearer picture of how much money you will need to have at the closing table.

• How high does my FICO have to be to qualify for a home mortgage?

While there are many factors that influence the qualification of a home mortgage, when it comes to your credit score, we generally say that a 600 FICO will qualify. Depending on debt-to-income and payment history, we can sometimes qualify as low as a 580 FICO.

• Will my information be shared?

As a mortgage broker, we do need to share your information to some extent while we submit and close your mortgage loan. Some companies that we share information with include our lender network, title companies, appraisal network, and sometimes real estate agents (if you do not already have an agent). We do not sell or share your information for purposes of future solicitation.

• Why use a mortgage broker instead of applying directly with a lender.

As a mortgage broker, we have contracts with several lenders. Some of the lenders that we have contracts with only fund loans from brokers and do not have a retail department. So by choosing a broker, you have access to more lenders and we are able to shop the rate through multiple sources to ensure that you get a loan to best fit your goals and situation.

• What's the difference between a cash-out refinance and a home equity loan?

Home equity loans or home equity lines of credit (HELOCs) are usually second mortgages. In other words, they are mortgages that you take out on top of the main mortgage you have on your home. This makes them second liens against your property and therefore more risky. A cash-out refinance is not a second loan; it is a new first mortgage.

• What is equity? How can it help me get cash out of my refinance?

Home equity refers to the appraised value of your home minus the amount you still owe on your loan.

The more equity you have, the more money you may be able to get from a cash-out refinance. Many homeowners take cash out to pay off high-interest debt or make home improvements. Try our mortgage calculator to see if you have enough equity to reach your financial goal.

### Why Choose Homewise Financial?

• Application process is completely online.
• As a mortgage broker, we have exclusive access to a vast network of lenders to offer competitive rates and diverse loan programs to suit your goals.
• Personalized experience. We will “hold your hand” through the process to ensure your comfortability with the loan program and process.

If you have questions about our company or the process, we want to hear from you. We will communicate with you however you are most comfortable. Simply hit the link to the right, book an appointment, or give us a call. We will be glad to answer any questions that you have.