The Purpose And Benefits Of A PITI Mortgage Calculator
[I:http://www.seo-coaching.net/wp-content/uploads/2011/03/KellyTurner22.jpg]Purchasing a house is a big monetary commitment that spans many years. This is why it is important to understand what a lender considers to be included in the full amount being borrowed and how to calculate the actual value of the monthly payment that will be required. A PITI mortgage calculator can help do just this. PITI is an acronym meaning principal, interest, taxes, and insurance; all of the components of what the bank considers the total amount due.
The produce the amount of monthly payment that will be due, a person must input the values for the interest rate, term of the loan, principal being borrowed, annual taxes, and annual insurance due. Some calculators will supply only one PITI value due, while others will give one for principal and interest only. This helps to better understand the effects of insurance and taxes.
A few sites offer up the total of what is being contributed to interest and what to principal. It is therefore possible for a person to gain an understanding of the costs associated with borrowing a large sum of money and making the purchase.
The calculator presents the opportunity to input differing interest rates and see how they affect the monthly amount due. The effects of an adjustable rate mortgage can better be understood by being able to do this. If it fluctuates a great deal, a person may not be able to afford the loan.
Insurance premiums and taxes also contribute to the bottom line dollar amount due every month. By being able to change these variables, a person can better choose the amount of coverage they would like and the area in which they want to live. Taxes are not the same in every city or district.
A PITI calculator can be a very useful device when trying to decide where to purchase a home, how much to borrow to do so, and what kind of interest rate to choose. By inputting all of the relevant information, all will present the required monthly payments, some even giving a much deeper breakdown for a greater understanding.