Estimate your monthly house payments and total interest
A mortgage is a type of loan specifically used to purchase real estate. The property itself serves as collateral, meaning if the borrower stops making payments, the lender can take possession of the home through foreclosure.
Formula:
A standard monthly payment usually includes Principal and Interest. Depending on your lender, it might also include property taxes and homeowners insurance (PITI).
While 20% is the traditional benchmark to avoid Private Mortgage Insurance (PMI), many lenders allow as little as 3% to 5% down depending on the loan type.
A shorter term (like 15 years) has higher monthly payments but lower total interest costs. A longer term (30 years) has lower monthly payments but costs much more in interest over time.