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Mortgage Calculator Variables

An additional benefit of good mortgage calculators is that they show you all variables that you should enter in order to get accurate values. A popular question among homebuyers is, “Do mortgage calculators include taxes and insurance?” A good one should take those into account and more.

Here is a simplified list of the variables to look for in a mortgage calculator, the components of your mortgage payment.

• • Although this might vary from one lender to another, generally your mortgage payment should include the principal amount, interest, property tax, and private mortgage insurance. All those variables determine the total amount you will pay back.
• Down payment and Loan to value (LTV) ratio
  • Make sure you look for a mortgage calculator that calculates down payment and LTV. Down payment refers to the lump sum payment you make towards the principal value of the property while LTV is a ratio comparing the value of the loan to the value of the property. The two variables determine, among other things, your loan limit, interest rate and thus monthly payments.
• Debt to income ratio
  • This is a ratio comparing your total loan obligations (debt) with your gross monthly earnings (income). It shows if you make enough to pay your monthly debt, including mortgage payments.