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Monthly Mortgage Payment
There's more to it than just you monthly mortgage payment because you also have to factor in the taxes, insurance and possibly a condo fee. So if you use a mortgage calculator and figure out that you monthly payment is $800 then the next thing you need to do is check the taxes. It might say $3000 per year which breaks down to $250 per month plus the $800 for the mortgage so you're at $1,050 now. Then if it's a condo you have to check the condo fee which is usually over $200 which brings you to $1,250 for a total. Also remember if it's not a condo then you're not in the clear completely! That means you have to buy a lawn mower, maybe a snow blower and a few rakes!
Those are the big pieces of your monthly mortgage payment. Now we can break it down a little bit more by using a mortgage calculator to show you an amortization schedule. I'm sure you know that the first few years you wont be paying down very much principal. Most of it will be going toward interest. The amortization schedule will show you exactly how much principal you're paying each month. You can also use any interest calculator to figure out how much you'll save in interest buying paying an extra $20 toward the principal each month. It's a great way to save money because it's basically a savings plan that you can't touch until you sell the home.
Monthly Payment - $599.55
Month Interest Principal Remaining Balance
$100,000.00
Month 1 $500.00 $99.55 $99,900.45
Month 2 $499.50 $100.05 $99,800.40
Month 3 $499.00 $100.55 $99,699.85
Those are the first few months of your mortgage payment. You can see that the amount of interest towers over the principal, but I want you to see it from a different angle. If you add $105.05 to your first mortgage payment, which is the amount of princpal in the 2nd month, then you save that amount of interest next to it over the course of 30 years. The more you owe the bank the more you pay in interest and it's recalculated every month. Each time you pay a little bit down on the $100,000 you owe less interest the next month.
Searching around for a good interest rate can significantly lower your monthly mortgage payment. Even if it's just a 1/4 % it's $30-40 per month that you don't have to throw away to interest. You can also negotiate that number, so when you're searching around try to push them like a car sales man. "Is that the best you can do??" "My other bank was a bit lower, are you sure you can't do any better??" Those are a couple of non pushy questions if you're uncomfortable negotiating. Make them feel like they're in competition even if they aren't.
Your down payment has a lot to do with your mortgage payment as well. Like I said before, the more you owe, the more you pay in interest. So if you need $20,000 to get 20% down and you only have $10,000 then you owe the bank $10,000 more. That means a couple things. First, you basically get a second loan for the $10,000 and pay it over 15-20 years. You can use my mortgage calculator to figure out the monthly payment options. The second option is to get one large mortgage payment with PMI, which is Principal Mortgage Interest. You have to pay PMI until you've paid down 20%. The bank wants you to owe less because the real estate market could go down. If someone doesn't pay their mortgage the bank will usually be able to get their money back.
Then amount of money the bank says you can have is called you borrowing power or buying power. The bank figures out how much you can afford per month and which means they know about how much you can afford for a home. They factor in a lot of other things like credit scores and loan history. There's a few examples below of the different mortgage loans that banks offer. | 
