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  • Writer's pictureStephen Michalakos

What to Know about Mortgage Calculators


It's tempting! I know!

You're at home or even work and here it comes.. the rabbit hole of the internet. You go to a web"Z"ite and browse a few sweet mansions to get the blood pumping and then it hits you.

"Obviously I can't purchase this twelve million dollar estate on the cape and I'm fine with that (sort of), but let's just see what I should be looking at.. you know.. for fun."

Then there it is - the almighty "mortgage calculator" displayed proudly to save the day and bring your home browsing back down to earth.

Using a mortgage calculator or other online tool to figure out how far your money can go is super tempting, trust me I totally get that. It's a widget that provides instant results and gratification to guide you on your financials.

All you need to do is enter your salary, how much debt you carry, and a rate you think you can get and it spits out a really satisfying number for you to scour the internet with.

Afterall, anything from a website as credible as this one that also uses math is pretty much the end-all be-all, ...right?

Not quite. Two reasons.

Reason 1: Most of these "calculators" routinely ignore property taxes and any exemptions, mortgage and homeowners insurance, other personal debts, mortgage loan origination fees, and all of the other costs associated with getting this all wrapped up in a big bow. It's not pleasant to acknowledge how much money this costs, but it's MUCH worse to underestimate the true cost and be surprised later on.

Reason 2: You are a human being for goodness sake - you are more than a simple calculation or algorithm! Putting a mortgage estimate takes more than just numbers. Every aspect of who you are is important to determining what mortgage program you're eligible for and what assistance you're able to utilize.

Perhaps you are a first time buyer and you have access to down-payment assistance, financeable closing costs, and even a lower monthly payment; In this case, you can save on PMI, get some help on closing costs and can even put as little as 3.5% down given the right circumstances.

Maybe you're a disabled veteran on a fixed income..or a first-responder with access to assistance programs.. this is a huge opportunity to utilize programs that help cut down costs to help you buy home.

Perchance you are selling your home and you'll have proceeds to contribute to your next home. This should be able to help you greatly reduce your monthly payment and even completely cut out some infuriating fees.

No matter your story, the point remains the same! Your individual circumstances will help guide your wallet to the best financial decision for you. The best mortgage calculator is your mortgage lender, who is also a real person. Their job day-in and day-out is to stay updated on each piece of news regarding the market and to provide insight on the best programs and ways to save you money and time.

If you become serious about looking and want to venture out to see some homes, get with a couple of lenders and see how creative they can get.

For a directory of lenders that I repeatedly work with and trust, check out my 'Resources' tab or click here.

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