I’m looking for a house and keep playing with mortgage figures to be sure I can afford various places. I hear Yahoo has a good mortgage calculator: how do I use it?
There are a million and one mortgage calculators available, including lots of different apps for your smartphone whether you’re an iPhone or Android user (and yes, even you Windows Phone users have choices too). There are also specialized calculators and even Web sites that purport to offer a simple mortgage calculator but are really just a vehicle for mortgage advertisements!
The calculation is fairly straightforward, with three variables: loan amount, interest rate and number of payments, but you don’t want to figure it out on paper or with a four function calculator, for sure!
If you’re curious, here’s the formula for a loan of “loan” dollars over “duration” months at a monthly interest rate “monthly_interest”:
Payment = loan [monthly_interest (1 + monthly_interest)duration]/[(1 + monthly_interest)duration – 1]
Yeah, a specialized calculator is looking pretty easy right now, isn’t it?
Fortunately Yahoo has you covered. All you need to do is a search on the Yahoo.com site for mortgage calculator…
Now you need to look below the advertisements on the page. Scroll down a bit and you’ll see the interactive mortgage calculator…
Each of the fields on the left can be changed to meet your own situation, in case 200,000 is insufficient for your housing needs or, for that matter, it’s too high.
Regardless of your situation, enter the value of the home you’re interested in, the amount of down payment you can afford (tip: always put down as much as you can afford!), pick a loan term and enter the interest rate that your bank has offered.
Everything updates automatically, as you can see:
What’s really neat is that you can move the cursor around in the graphic representation of the mortgage data to find out, for example, when your payment will split evenly between principal and interest, when you’ve paid off exactly 50% of your principal loan amount, etc.
Nice job, Yahoo. This makes it easy. Now the hard part: finding the perfect house. Good luck!