Mortgage Calculator Tip: Remember Property Taxes, Insurance

When you’re wondering about qualifying for a mortgage, your first thought is obviously whether you can make the monthly payments - and what those payments even amount to.

According to the Denver Post, getting an accurate mortgage calculation isn’t as easy as some people try to make it.

For consumers using an online mortgage calculator to see what they might owe on a new home loan deal, the problem with your payment numbers comes out in the form of property taxes and homeowner’s insurance, which usually don’t get factored in, but which can add a hefty chunk to the monthly payment.

In many cases, property taxes are calculated using a mill rate, which means you are taxed a certain amount per thousand dollars of assessed value. If you owe a mill rate of 20 on a $300,000 home, that’s $6,000 a year - or a whopping $500 a month that the mortgage calculator didn’t tell you about.

Be sure, when using a mortgage calculator, that you factor in the costs of first and second mortgages, plus taxes and hazard insurance, resulting in a more realistic idea of the bottom-line cost.

Also, be sure if you are taking out an interest-only mortgage or an adjustable-rate mortgage, that your mortgage calculator shows the size of payments a consumer would make down the line, not only right now.