Step 6: Mortgage payment.

If you make the decision to buy a home based on whether you can afford the monthly payment, you will need to examine the effects the loan length has on the monthly mortgage amount. With an estimated sale price and a mortgage calculator, you can calculate approximate payments for 15-year, 20-year, 30-year, and 40-year fixed-rate loan. Keep in mind that the further out in time you extend the mortgage the more total interest you pay. You will probably need to try out several different sale prices and lengths of mortgages to determine what will ultimately be most comfortable for you. Following are steps to guide you through the process:

• 1. Estimate a sale price.
• 2. Subtract the amount you can make as a down payment.
• 3. Enter the resulting number you need to borrow from the lender into a mortgage calculator.
• 4. Enter the number of total monthly payments (i.e. 180 for a 15-year, 240 for a 20-year, 360 for a 30-year and 480 for a 40 year mortgage)
• The calculator will display the combined monthly principal and interest payments.

 Go To Step 7