Alabama Mortgage Calculator: Estimate Your Monthly Payment
Updated: January 18, 2024
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When it comes to mortgage payments, homeowners in Alabama pay around $99 less than the national average. But before purchasing a home in Alabama, consider other factors like the state’s tax rates and your personal finances.
Alabama has the second-lowest real estate tax rate and annual property tax, turning out to 0.41% and $895, respectively. You can browse through Alabama’s Department of Revenue website to learn about the state’s property taxes.
With MoneyGeek’s Alabama mortgage calculator, you’ll get a more personalized quote and be able to tweak factors according to your unique situation. This guide also includes why and how to use our mortgage calculator, how to lower your monthly payments and more. It’ll be easier to compare offers from several lenders and determine the right option for you based on your loan payments, taxes and other related expenses.
Start Here: Plug In Your Mortgage Factors
MoneyGeek’s Alabama mortgage calculator offers a well-rounded estimate of your monthly mortgage payment, accounting for 12 different factors. If you’re unsure of its meaning, you can find descriptions below.
Why and How to Use Our Mortgage Calculator
The typical home value in Alabama is $134,300. Whether you’re looking to spend more or less, our mortgage calculator can help you set a budget for your potential home. MoneyGeek’s Alabama mortgage calculator integrates 12 homeownership factors, revealing how each factor influences your mortgage payments. So, you might also be able to pinpoint which expenses to cut.
When using MoneyGeek’s Alabama mortgage calculator, decide how much you can afford, the type of mortgage you’ll purchase, the loan’s total cost and interest and when you want to pay it off. To determine your homeownership costs, you’ll need to gather information about the following factors.
Home Price:
In this box, include either the maximum price you can afford or the loan amount you’re interested in.
Down Payment:
For your initial up-front payment, you can enter either a percentage of the purchase price or an amount in dollars.
Interest Rate:
Input the loan’s interest rate. MoneyGeek also has mortgage rate reports from lenders daily.
Loan Terms:
Loan terms are commonly 15 or 30 years, but you can choose your desired loan length.
Payments per Year:
The most common payment per year is 12, which amounts to monthly payments.
Property Tax:
Under “Other fees,” you can input Alabama’s annual property tax of $895.
HOA Fees:
You’ll need to pay either annual or monthly fees if your property has a homeowner’s association (HOA).
Principal & Interest:
The principal is the amount you borrow from a lender to buy your home. You pay interest to the lender for the money you borrowed.
Monthly Payments:
Monthly payments include your principal and interest, property taxes, home insurance and HOA fees.
Principal Payment:
It’s a portion of your monthly mortgage payment that reduces your overall balance.
Interest Payment:
This covers your interest charges to your lender.
Total Cost with Interest:
The total cost is repaying your principal balance and adding the interest you pay the lender over the term of the mortgage.
If you’re looking to save on monthly expenses, there are several ways to reduce your mortgage payments per month.
- Less expensive house. Your monthly mortgage becomes more affordable when you take out a smaller loan.
- Different location. Out of the 50 states, Alabama has the second-lowest real estate tax rate at 0.41% and annual property tax which costs $895. Hawaii is the only state with lower rates.
- Find a lower interest rate. If you’re able to pay a larger down payment, your interest rates may also decrease.
- Extend your loan terms. Although you’ll pay more interest over time, your monthly payment is easier to manage.
Next Steps: What to Do After You Have Estimated Your Mortgage Payments
The homebuying journey can be a challenge, but MoneyGeek gathered important details to help guide you through it.
- Shop & Compare Rates - It’s important to compare offers from several mortgage lenders before taking out a loan. Check out our Alabama mortgage rate page for more details.
- Not Ready to Buy? - If you’re looking to rent or buy property in Alabama, there are several factors to consider if you’re on the fence.
- Learn More - Unsure about what type of mortgage you need? MoneyGeek lists different types of mortgages where you can read about reverse mortgages, VA loans and FHA loans.
Frequently Asked Questions About Mortgages in Alabama
It depends on how much you’re comfortable spending on your mortgage payments. Generally, mortgage lenders determine affordability based on debt-to-income (DTI) ratio. Your home loan is considered affordable if the DTI is 43% or lower.
The outstanding mortgage amount in Alabama is $141,302 on average.
Some mortgage programs require less than 5% for your down payment. Meanwhile, government-supported programs like those offered by the VA and USDA don’t always require down payments.
Conventional loans, or non-government loans, usually require private mortgage insurance (PMI) if you have a small down payment. If you refinance and your new loan doesn’t exceed 80% of the original property value, you might be able to remove PMI.
Alabama’s annual property tax costs $895 on average and is the second-lowest in the country.
On average, the monthly mortgage payment in Alabama is $1,060, which is $99 less than the national average.
The median price for a home in Alabama is $134,300.
sources
- Alabama Department of Revenue. "FAQ." Accessed February 16, 2022.