The Uses And Benefits Of Mortgage Calculators
Perhaps you want to buy a house for the first time
. Or maybe you want to upgrade to a bigger house.
No matter what your reason is for taking up a mortgage bond, it's wonderful if you have the right tool available that can tell you within seconds whether you can afford to buy your dream home or not.
If this sounds like you, you're in luck: there are nowadays a myriad of mortgage calculators available online.
The first step you have to take is work out how much you can afford to pay every month. You can only do this is you have a budget for the family income and expenses. Once you have listed all your monthly income and made a list of all other expenses apart from the bond repayment, you will know exactly how much is left. Allow a certain amount for unforeseen expenses and the rest is available for your monthly home loan repayment.
Now find a mortgage calculator and enter the purchase price of the house you're interested in. Usually the calculator will have a field to enter the amount of the deposit you can put down. This will determine the loan which you have to apply for.
After entering the number of years for which you want a loan and the interest rate, hit the calculate button. The program will then accurately work out how much you have to repay every month. It's really as easy as that.
Just below that you have to enter the number of years for which you want to take up a mortgage and lastly the interest rate.
Try a variety of different repayment term and interest rate combinations. You will for example notice that lowering the repayment term from 25 to 20 years doesn't cause a drastic increase in your monthly installment, but in the end you will have a fully paid house five years sooner and save a lot of interest in the process.
Some of the more advanced calculators have a field where you can enter any additional amount you want to pay into the mortgage every month.
Many of the more complex calculators will allow you to enter any additional amount you can afford to pay into your mortgage bond monthly. If your calculator allows this, you will see at a glance that even an extra 100 USD per month will in the end cause the mortgage to be repaid much sooner, saving you a lot of unnecessary interest in the process.
Mortgage calculators came as a godsend for the ordinary man and women.
Mortgage calculators have empowered the man in the street. Before they arrived on the scene, you needed to know the correct mathematical formula or be a guru with spreadsheets to calculate a mortgage repayment. Now it has become as easy as filling out a simple form and hitting the calculate button.
by: Tony Woi
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