How Long Should I Finance My New Home – Handy Mortgage Calculator

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How Long Should I Finance My New Home – Handy Mortgage Calculator

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Use the free mortgage calculator below to see what you may end up paying on a new home.

Plus your numbers into the mortgage calculator below to find out how long to finance your new home. By the way, years ago I bought my house in Dallas, TX.  An old boyfriend told me that I should put down as little as possible and finance it for as long as I possible.  I’m sure he assumed that within a few years I would get married, have children and upgrade to a larger house.  The mortgage companies know this.  The mortgage companies have statistics that new homeowners might sell within five to 10 years due to any number of life events.

When having children the new home may not be large enough for a family. Especially if the couple wants more than two or three children.  Sadly some sell to soon due to divorce.  Whatever the reason, mortgage companies know by statistics that homes will very probably get sold within five to six years. They will have made a lot interest without very much of the principle being depleted. Basically, you will be paying mostly interest and taxes in the early years. The good news is your lovely home will have appreciated over time.

How Much Should I Pay Down On a Mortgage

mortgage calculatorYour real estate agent says that to finance a home loan you can expect to give at least a 20 percent down payment. You tell your wife what you’ve been told on the phone, and she is ecstatic that you will be able to afford the home of her dreams. Everything seems fine until your real estate agent tells you that to make your monthly payments cheaper, you are going to have to give up on the idea of making a 20 percent down payment.

Should I Finance for Fifteen Years or Thirty Years

How long should I finance a mortgage? What will my monthly payments be and how much interest will I pay? Check the mortgage calculator below to crunch some numbers.

Personally I wish that I had mortgaged my house for only fifteen (15) years.  I bought that house in 1987 and sold it in 2016.  I took the advise of the old boyfriend and financed it for thirty years.  If I had only done the fifteen year stint, I would have had the house paid off so much sooner.  What if I had wanted to sell sooner?  I would have had so much more equity in that house.  Due your own research and decide what is best for you.  A 30 year mortgage is great for some people, but may not be for everyone.

The average mortgage loan in the US is around $270,000. This is useful information to help you understand what interest rates and payments will be like. But how long should I finance a mortgage? This is something that will ultimately depend on your own situation and needs.  The advantage of financing your new home for thirty years is that your monthly payments will be lower in the long run.  But, you will pay a lot more interest to the mortgage company or bank.

Choose what type of interest rate is right for you?

A fixed-rate mortgage is a type of mortgage loan that has the same interest rate for the entire life of the loan. This means that you will be paying the same amount each month for your mortgage, regardless of how long it takes you to pay off your loan. Fixed-rate mortgages are usually offered for 15 or 30 years, but some may last even longer.

An adjustable rate mortgage is a loan that has an interest rate that changes over time. Usually there is an attractive introductory rate for this type of mortgage. The adjustable rate mortgage can start out at a low rate, but then the interest rate can increase after several years. The length of the loan varies depending on how long it takes for the interest rate to change.  My mortgage was an adjustable rate based on T-Bills back in 1987 and it went down for many years. It may not be that way now in the 2000’s, but check with your real estate agent. Use the mortgage calculator below to figure the interest payment at different percentages.

What is the minimum credit score I need to qualify for a mortgage?

mortgage calculatorUsually a mortgage lender will use your FICO score to decide credit worthiness.   The FICO Score ranges from 300-850.  You will need to have a score of 620 or higher.  For an FHA loan the minimum FICO score required is 580, but you would probably want a higher score for a better interest rate.
Also it’s important to understand that even though a lender may tell you they require a certain credit score in order for you to qualify for a loan, there’s no one-size-fits-all answer here! While lenders typically look at at least one of your scores when determining whether or not you qualify for a loan, they may also look at other factors like income, employment history, and debt-to-income ratio (among other things).

So if you’re wondering what your minimum credit score is and what you can do about it—that’s where we come in!

Should I make extra payments on my mortgage?

When a borrower makes extra payments on their mortgage, that money is usually applied to the principal. In other words you can be paying down on the balance owed.  Paying extra every month will also save a lot of interest in the long run and shorten the length of your loan. The interest that you save will also allow you to deduct that on taxes.  Paying extra every money will increase the equity in your home faster if you make those extra payments and get it paid off sooner.  Check with your lender because some deals have a prepayment penalty. Make sure if you do pay extra one month, note on the check how much will go to the principal. I would also make a note on the payment stub or if you pay online.


Take advantage of this mortgage calculator?  Let me now how it worked for you in the comment section below.

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Conclusion: To get a great interest rate it’s best to have a credit score in the 700’s.

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