How to Use Rocket Mortgage Calculator

How to Use Rocket Mortgage Calculator

Before applying mortgage, you should know about the basic information, including the mortgage calculator. Here is the complete explanation of Rocket Mortgage calculator.

Buying new house is not simple thing to do, particularly if you rely on mortgage or home loan. You need to know how much money to pay monthly until all debt is completed. In basic calculation, mortgage does not use complex mathematic procedures. However, it involves various aspects that makes the calculation is tiresome for new comers. That’s why you should know about Rocket Mortgage calculator. How to use it? More about this topic will be explored in the following sections.

Steps to Use Rocket Mortgage Calculator

To calculate mortgage, you can use online calculator or mobile app. Both provide the same purpose, and they estimate precisely. Just visit the official website if you use laptop or PC. For mobile device, install the calculator via mobile app store based on your device platform. After that, the rest of steps will be in below list.

1. House price and down payment

First thing on Rocket Mortgage calculator is the house price and down payment. Both are inseparable aspects that are always the key part in mortgage business. The house price is about how much property costs when you buy it. If you already have a house, the price will value yours.

Bank or a mortgage company has the range related to minimum and maximum loan for clients. Some people can get a house more than $100,000, and the rest might be lower. On the other side, you may be a person that has privilege to get mortgage more than $250,000. The price depends on where the property is located. Urban, suburban, rural, small city, capital, metropolitan, and other cities have different price. That’s why you will not see two houses with the same specs have the same price.

Down payment is initial money to pay when the mortgage contract is signed. Rocket Mortgage calculator determines this part using percentage basis. Usually, the minimum down payment is 20% and 30% depending on credit history, income, and financial status. It means you pay 30% of money from the house price, and the rest will be calculated as mortgage. More money you put at initial payment will help to reduce the regular one.

2. Taxes, and insurance

Rocket Mortgage calculator will include the taxes and insurance as well. Rocket Mortgage company puts the taxes into consideration due to the future risk. As you know, the taxes might increase and decrease in specific time. These taxes are what you pay based on property's value yearly.

Moreover, insurance is another reason you pay more. New home has low insurance, but not after ten years. The insurance company will review and reassess your property again. As the result, the insurance might be higher if the risk is increasing and vice versa. Besides, insurance is mandatory for mortgage and bank when doing contract in this field. High risk location has more insurance that you should pay.

3. Interest rate and term

Rocket Mortgage calculator does not complete without interest rate and term. Both determine how much you pay monthly. The interest rate has two options: the fixed and adjustable ones. Fixed rate will have the same payment until end of term. It is helpful when you do not want much hassle related to payment calculation. On the other hand, adjustable rate will change based on the latest rate. You pay the fixed one for the first five years and change to adjustable rate for the rest of mortgage. People who choose this option understand the value and benefit of mortgage to get more profit.

Meanwhile, mortgage term is how long you will pay until the loan is paid off completely. As it mentioned above, mortgage involves vast money. This kind of loan becomes option because people don’t have enough money to pay in cash when purchasing a property. The term is usually more than 15 years and up to 30 years. Clients can apply for new one or consolidation existing one with refinance program. This topic will be explained later.

4. Affordability

Rocket Mortgage calculator doesn’t measure the money you should prepare and spend. Furthermore, it shows affordability when you decide to apply and obtain the mortgage. Affordability has several aspects, including the annual income, other debts, and credit rate.

More about Rocket Mortgage Calculator

After understanding the way mortgage calculator works, few topics will help as the basic knowledge. The next sections give a brief introduction regarding mortgage system, refinance, and mortgage closing.

1. Mortgage system

Mortgage is a loan specifically for property provided by private company, bank, government agency, and other parties. As a loan, you have obligation to fill the payment until everything is paid off in the last term. The function depends on what loan you get, such as purchasing new house and financing your needs. Both are the major reasons why people do mortgage.

2. Refinance

The Rocket Mortgage refinance is a useful option for people to get several benefits. You can have the lower payment, pay off mortgage early, and obtain the cash with new term. In general, refinance means reviewing and consolidate existing mortgage into new one. Of course, you may start again but gain several benefits.

Home loan uses long term, but financial industry always changes. Besides, some people might not be in the same level as ten or twenty years ago. For example, you have a job to support your mortgage today. In five or ten years ahead, your salary may be more than today then you decide to close the mortgage or obtain the new one. However, existing mortgage is still on a progress. Therefore, refinancing will handle new term and consolidate the rest.

3. Cash out from mortgage

Besides buying new house, mortgage is an option to extend the financial support. You may have business and need investment. Applying the loan to bank and credit union takes time. On the other side, you don’t have enough cash. The solution is simple, and mortgage becomes favorable choice. You just use your own property to get the loan from Rocket Mortgage. The calculator will help you about this plan.

From explanation above, you now understand that mortgage and its calculator cannot be separated. In past time, people still relied on mortgage agent to calculate everything. Today, everything is in your hand, and mortgage process becomes more reliable. Keep in mind Rocket Mortgage calculator is only for estimation. It is not the fixed money you spend when your mortgage application is approved. You might get the low or high price compared to what is already measured in the calculator.

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