Use a Mortgage Calculator to Determine and Solidify your Financial Future
Today, mortgage options are varied to accommodate a multitude of borrowing needs. Lenders offer mortgages to buy a home or to re-finance a home. Borrowers can also apply for a mortgage to make home improvements or to consolidate debt; allowing more choices and freedom with their finances. Because home financing is a big investment and such an important decision, it makes sense to do your homework and educate yourself on all that is available in order to make an informed decision that is right for you.
Obtaining a home mortgage is a step by step process and is determined by many factors. Pre-qualifying for a mortgage is a definite advantage and is now possible with the many financial tools available to consumers today. Many of these tools are available online at no cost to consumers. Using a calculator to determine the right home to live in or perhaps buying a second home as an investment will be much easier when you use real facts to outline your borrowing and buying power. This step will also save you precious time and money looking at property you will be approved for rather than wasting time looking at property that is too expensive. Being organized with the right information will make the borrowing and purchasing process easier to handle. With your information at your fingertips you can approach your lender with confidence. The key is to find a knowledgeable lender who will make an informed decision based on your borrowing power and total financial situation.
Choose the right tools to build a secure future:
Precise calculations are imperative in making an accurate decision; and to ensure that the borrower meets all the requirements and can also meet the commitment to re-pay the mortgage amount. A mortgage calculator (or mortgage payment calculator) is a frequently used financial tool that uses specific personal and financial data to confirm the borrower’s qualifications, and to calculate mortgage payments based on the borrower’s information to ensure the pay-back commitment will be met.
A mortgage calculator does the math for you easily and accurately, and uses the following information obtained from a mortgage application to determine qualification:
- Personal information – name, contact number(s), address (and how long you have resided here), citizenship, age, marital status
- Existing earnings and other monies received by the borrower. This factor determines the dollar amount of the mortgage money you will qualify to borrow, therefore, it is important to include all available income from all sources.
- Financial history and credit score / rating. A good credit score will assist in providing the best mortgage at the best rates available.
- Existing debt load and other financial commitments. The debt to income ratio is essential to securing the total dollar amount needed to buy.
- Financial Assets and Savings. Assets and articles of real property value such as vehicles can be listed and considered in your financial evaluation. Savings is a definite plus as it shows responsibility in handling finances.
The amount of questions and information required will be determined by the lender. Disclosing pertinent information accurately will allow the application to go smoothly and quickly.
Once the data is received and accepted, a mortgage payment calculator can be used to determine the financial aspects, schedules and fees. There is a wide range of choices available depending on the calculators programming and can include:
- Total mortgage money needed
- Income required
- How much money the borrower has for a down payment
- What payment the borrower can afford
Once these facts have been resolved, the next step is to choose a mortgage that will coincide with the lenders financial status. You can then project your mortgage results by choosing from the many options available:
- The frequency of mortgage payments is diverse and can include: weekly, bi-weekly, monthly. You can compare payment frequency to see how you can receive a faster pay-off and lower your overall interest charges.
- Amortization period of the mortgage will determine how long it will take to pay back your mortgage. Yearly charts are available for these comparisons.
- Choosing a fixed (guaranteed) rate of interest or a variable rate of interest. This takes into consideration the comfort degree of the borrower.
- Combining real estate taxes, home insurance and mortgage insurance in your mortgage payment versus paying these items separately.
- Interest only loans are self explanatory. You do not pay any principal amounts, you pay only the interest. Often this option allows people who would not normally qualify for a home to purchase and payments are much lower.
- Give a detailed view of principal and interest payments.
- Data and graph snapshots allow the information to be easily read and understood.
These calculating tools can also provide valuable information on current and competitive interest rates and fees associated with obtaining a mortgage. Keeping a close watch on these numbers will make a huge difference in your payments and your payback time. You can also compare one mortgage against another to assure you are getting all the options available to you (some lenders offer the option of deferring a payment without penalty, some do not). As well, there are helpful tips and advice on getting the most out of your mortgage.
Choosing the right mortgage is an important step to preserve and secure your financial future. Calculators will assist you to make the right decision based on accurate information to insure you do not get trapped into a mortgage you can’t afford. With so many choices (with varying degrees of information) available to consumers today, using these accurate financial tools is a wise investment that will give you a complete understanding of your finances and take the guess work out of getting a mortgage. Rest assured, the time spent doing the proper calculations to obtain a mortgage will definitely save you money and give you peace of mind with your mortgage decision-making. Be prepared and know your financial future is safe and secure with the right information at your fingertips.