Mortgage calculator helps homebuyers

Wondering whether to take the plunge and buy your first house? Thinking about moving up to a bigger or fancier home? Bankrate's mortgage calculator is an indispensible tool to help you determine how much home you can afford.

Plug in the amount you want to borrow, the mortgage term length, the interest rate and the day your mortgage would begin, and the mortgage calculator can reveal your expected monthly payment.

The calculator also pinpoints your new loan payoff date if you pay a little extra on your mortgage each month or make an extra payment each year.

For example, a 30-year fixed-rate loan of $200,000 with an interest rate of 4.75 percent would cost you $1,043.29 each month. If you started paying Sept. 1, 2010, and stayed in your home for the duration of the mortgage, you would pay off the loan Sept. 1, 2040.

The mortgage calculator shows you that by simply adding an extra $50 each month to the mortgage payment, you can pay off the loan nearly three years earlier. Have an extra $100 to spare? The loan will be paid off five years earlier.

Other costs

But don't forget that the mortgage isn't the only cost associated with owning a home. You'll also need to pay property taxes and insurance each year, and perhaps condo or homeowners association fees.

And then there are unpredictable things like home maintenance and repairs, which can lead to major sticker shock if you don't have money available to cover the costs.

So, it may pay to be cautious and not borrow the maximum amount for which you are eligible. That way, you'll have more cash each month to cover those unexpected costs that invariably arise.

To get you in the right ballpark, check the mortgage calculator first to help you figure out what you can reasonably afford.

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