A house is among some of the most important assets that many of us purchase in our lifetime. Due to its importance and high price, it is necessary to do your homework with due diligence and sufficient research before purchasing a house, especially when seeking a mortgage loan. A mortgage calculator is very helpful when doing such research and should be considered one of the most important tools that you can consult.
With a mortgage calculator, you can determine the mortgage loan amount you are eligible for, and the loan amount you can afford to borrow. You can also learn about the monthly installments toward the mortgage loan repayment, tax deductions, and other aspects of a mortgage. A mortgage calculator will also tell you the total interest cost you are going to incur over the years of your loan.
However, the mortgage calculator can only provide all this information after you provide it with various details. While one mortgage calculator might vary from another, they generally require details like income, credit score, price of the property, and information about any existing debts and other liabilities.
Based on details provided by you, a mortgage calculator provides you with estimates of the loan amount you are eligible for and the mortgage you can afford based on your income and liabilities.
A mortgage calculator can be helpful in cases of both new mortgages and mortgage refinancing deals. It is not necessary that you consult the mortgage calculator of only the institution with which you are tying up your loan.
Almost all mortgage providers, including the banks, credit unions, other lenders, and third-party portals like financial portals and financial planning websites provide online mortgage calculators on their specific websites. Typically, an online mortgage calculator will ask you to input details like salary and other income, total loan amount, and applicable interest rates and will determine your total loan eligibility and monthly repayments.
Beside the applicable interest rate, a mortgage also involves a number of additional costs such as processing fees and foreclosure charges in cases of mortgage refinancing. Most mortgage calculators are designed in such a manner that they can also provide details of possible additional expenses. Apart from this, there are mortgage refinancing calculators that provide a comparison of the existing mortgage and a new offer. These calculators will ask for details like the outstanding mortgage principal, interest rates, remaining term of your existing mortgage, and the costs associated with prepayment of the loan.
As a word of caution, it’s best to consult mortgage calculators of established and renowned entities only to get a fair analysis of your mortgage eligibility and affordability. A number of government departments also provide mortgage calculators on their websites. You can also consult the official websites of the U.S. Government, the U.S. Federal Reserve, and the Government National Mortgage Association for online mortgage calculators and mortgage comparison calculators.
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