If you’ve paid attention while going through the process of getting a mortgage, you know there are a lot of different variables to consider. Before the internet became such an integral part of daily life, you’d have to go in and sit with a lender while they made the calculations for you.
Now, you can visit one of the many websites that features a mortgage calculator and do the preliminary calculations yourself.
How They Work
A mortgage calculator is an automated tool that allows you to enter numbers such as your income, the total amount of the loan, mortgage rate and amortization period to get instant feedback on different aspects of the mortgage.
As an example, you can find out how much your monthly payments will be, how much interest you’ll pay, and how changing different variables slightly affects these numbers.
The idea is to help you find out if you can afford a certain mortgage. You can also compare the numbers on different properties to see if one works out better financially than another.
Mortgage Calculator Benefits
Convenience is likely the biggest benefit of using a mortgage calculator. You don’t have to make appointments and go sit in someone’s office. You can just run the numbers yourself and get a good idea of the scenario. Most people tend to use mortgage calculators to see how much they can afford, or if a particular property falls within their budget, but there are other ways you can use one.
You can use mortgage calculators to get a complete look at a mortgage situation from a variety of angles. This may include playing with the down payment percentage, the payment schedule or the amortization period. In this picture, the prospective homeowner isn’t just trying to figure out if he can afford the house, but which configuration makes the most sense financially.
You can also use a mortgage calculator to figure out if it makes more sense to rent or buy. You may feel that continuing to rent is the most financially feasible thing to do, but the calculator may tell you otherwise. Using a mortgage calculator when it is time to renegotiate a mortgage is also very useful.
Basically, these mortgage calculators make your life easier and enable you to perform some complex calculations almost instantly. You still need to deal with lenders and agents and lawyers when buying a home, but you can go into it with a lot more knowledge and information if you choose to use a mortgage calculator first.