Aren't all payments basically the same?
At first glance, sure. Monthly payments are simply the amount that needs to be paid to the principal of a mortgage loan each month to bring the balance to zero over a predetermined amount of time PLUS interest accrued at a predetermined interest rate.
However, if you've spent any amount of time playing around with the calculators on our website, you no doubt know that an FHA payment is vastly different than a VA or USDA payment. There are funding fees or upfront mortgage insurance that might be added to your loan amount. That amount might change depending on how large your down payment is. There's also monthly mortgage insurance (MIP) that might be added to your principal and interest payment. And that amount might vary depending on down payment, loan term, or a combination of both.
So, sure, the fundamental formula for calculating a monthly mortgage payment is pretty standard. However, getting the other pieces of the monthly payment to properly fall into place is not as straightforward. We are literally obsessed with getting this right. Quite frankly, we appear to be the only ones. We routinely test competitor sites and regularly find errors. They may be small, but it demonstrates the motives behind the calculators' purpose.
You'll notice we don't blast you with ads or beg you to do a loan with us. We don't do loans. We provide tools to help you budget and plan. Yes, we need to make money, so we show sponsored rates and advertisements where appropriate. If you feel our ads are intrusive, contact us via our email form.
How Our Calculators Work
We won't bore you and break down all of our calculators, but we'd like to demonstrate our process and commitment to providing you the best payment calculators anywhere.FHA Calculator
The one that started it all. I was a government mortgage specialist for a large online lender. We worked on leads provided from various online sources, including the big one. My team was primarily dedicated to VA loans, with FHA loans sprinkled in. It was the FHA loan payments that most of my clients had trouble with.
FHA loan payments include two mortgage insurance premiums. The first is an upfront "fee" that is typically added to the base FHA loan amount (purchase price minus down payment). That's easy enough to calculate using basic multiplication and/or addition. The second mortgage insurance premium is not so simple.
Annual FHA mortgage insurance is actually paid monthly as part of your mortgage payment. The amount is fixed each year and is calculated using the average principal balance for the upcoming 12-month period. This isn't something you can just whip up with a pen and paper. Our FHA loan calculator takes the extras steps and uses the same MIP formula as HUD/FHA. The FHA payment we provide will match the payment of an FHA approved lender using loan origination software to originate real FHA loans.