“You’ve been approved!” The words you have always wanted to hear when you filled out the home loan application. It swirls through your mind the opportunities and memories you will cherish in your new home. Before you even start shopping for a home it is best to understand in real terms what you can afford. Your income level may make it tight for you every month to make the mortgage payment if you purchase too much home.

You may wish to know how much the home may cost you before you sign your contract. So you will need to be a financial calculator to figure out the monthly paper in real-terms. There is an easier way. The Internet has become the best place for mathematical equations and there are some great websites that will do the figures for you should you know the absolute basics of the transaction. Here are some of the factors that can help you determine what your monthly interest rate will be:

• Amount of home
  

• Percentage of interest
  

• Duration of loan (5, 15 or 30 years)
  

• Down payment
  

• Insurance (percentage of loan)
  

• Start date of the loan
  

Sites like bankrate.com and countrywide.com provide free online calculators. Save yourself time and frustration trying to determine the monthly payment when these programs offered free work well. Some of the calculators can also factor in extra payments to your schedule and will show the end result savings. An amortization schedule is also provided to show you how your payments over the thirty years reduce your liability and increase your equity in the property.

Most mortgage lenders will give you a maximum you can afford and should be within a few dollars of the actual dollar amount should you ask them for the monthly payment calculated. Your being comfortable with the mortgage payment will help you recognize your monthly commitment to the property. There is a lot more involved than just making the payment to the mortgage, utilities, upgrades and other expenses come into play when factoring in all your overall commitment.

By Jakob Jelling

http://www.cashbazar.com

Jakob Jelling is the founder of http://www.cashbazar.com. Visit his website for the latest on personal finance, debt elimination, budgeting, credit cards and real estate.

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