When it comes to taking out a home loan, the numbers are essential. You need to know how much money you have for a down payment, how much you’re generating, and how much you can afford to pay in repayments. It’s enough to generate you crazy, even with a good pocket calculator! That’s where mortgage calculators can be incredibly useful. They can take all of the figures you have as well as turn them into outcomes. You can change 1 variable (eg size of down payment) and know what effect that will have on your payment. And a mortgage calculator can perform it in the blink of an eye.
Like most things related to home loans, though, it’s not as simple as you mortgage calculator that does one kind of calculation. Instead there are numerous different types of mortgage calculators, and some which combine more than one feature. So it helps to understand what exactly you want to mortgage calculator to determine, so you can choose the right one.
Affordability calculator – this kind of mortgage calculator basically determines what you can afford. This is based in your current income and costs. Quite often with this kind of calculator you can alter the quantity of down payment you is going to be contributing, and see the effect it has on affordability. Sometimes, if you’re a bit close to the wire, putting in slightly more deposit will be enough to create the loan affordable.
Consolidating debt – these calculators consider the various options you have when consolidating debt, and how that will affect your home loan. These options could include: merging non-mortgage debt (we. e. credit cards) in to your existing mortgage, refinancing and existing mortgage and paying out a few extra debts simultaneously, or perhaps a situation where you have both a first and second mortgage on a property and you want to work out the cheapest approach to paying the loans away.
Payment calculator – essentially, this mortgage calculator calculates your monthly payment on the loan. You can use this to determine what effect a change in rates of interest might have on your own payment, whether you would be paying pretty much if you swapped to a fixed rate loan, whether paying fortnightly will make a difference, and so on.
Additional Payment calculator – mostly this really is used for determining the result of an one period lump sum payment, but can also be used to work out the effect of a normal extra payment, say $100 a 30 days. You can adjust almost anything, including amounts, frequency of additional payments and interest rates.
Refinance calculator – this mortgage calculator is mainly used for comparing different mortgages to determine whether refinancing could save you money. This particularly works well for those who have more than one mortgage and wish to merge them. You can also element in things like refinancing expenses, for example what you will be charged to pay out your own existing loan. If those costs are very high, it may not be worthwhile refinancing at all.
Amortization calculator – you will find two types of amortization mortgage calculators. One works out the savings a borrower makes on his tax in line with the interest paid, and the other determines the appreciation of the mortgaged property.
Comparison calculator – that one is handy is you have two very similar mortgages to select between. Usually you can change different aspects of each loan, such as interest prices or payment details, to see the impact. Mostly mortgage brokers use this type of mortgage calculator when producing their recommendations.
This is only the end of the iceberg! There are mortgage calculators for almost anything you can think of of a home loan, but the ones above are certainly the most common. If you visit any of the big lending companies online, such as Freddie Mac or Fannie May, you will be in a position to visit their interactive webpages and do your calculations online. Some other sites even allow you to download a mortgage calculator for free.
The important thing would be to let a mortgage calculator do the work for you. There’s no point spending hours slaving over your calculator or setting up a spreadsheet, when an online mortgage calculator can do the same in seconds.
