While the most exciting part of buying a home is looking at houses, the most crucial part is being informed. You want to be prepared and smart about your purchase. That is where mortgage calculators come in. These are tools that can help you get a better handle on your financial situation and the type of mortgage that is best for you.
5 Reasons to Use a Mortgage Calculator
Here are some of the best reasons you should use a mortgage calculator before buying a home.
- Extra costs. A mortgage calculator can help you understand the full impact a mortgage will have on your finances. It will show you numbers like the interest rate, payment frequency, and monthly payment amount.
- Affordability. A mortgage calculator can give you an idea of how much home you can afford to buy. Getting a mortgage is different than paying rent. While homebuyers tend to consider how much they are currently spending on housing, lenders look at other criteria to determine affordability. This includes:
- Annual income
- Monthly living costs
- Type of property
- Location of the property
- Amortization period
- Mortgage interest rate
- Type of mortgage
Crunching numbers in a mortgage calculator can help you better understand what lenders are looking for and your chances of getting a mortgage.
- Insurance costs. If you are putting less than 20 percent towards the down payment, you’ll have to pay for mortgage insurance. This type of insurance protects the lender against you defaulting on the loan. A mortgage calculator can help you see how much you’ll need to pay for the insurance, which allows you to plan a more accurate budget.
- Refinance costs. Sometimes, you are not happy with the mortgage you have. Opting to refinance it can help you access better interest rates, better contract terms, or both. A mortgage calculator can help you see how much you’ll save by refinancing your mortgage right now.
- Monthly payments. Knowing what you’ll be paying each month is vital to the planning process. You can use a mortgage calculator to determine your costs, including property taxes and your mortgage interest.
A mortgage calculator is one of the most useful tools for homebuyers. Remember, though, that it is only a tool. Lenders have different criteria for mortgage applications, so it is best to talk to a mortgage professional first.
Get the most from a mortgage qualifier calculator in Ontario by using the right numbers. You may need to research property taxes or condo fees, but inputting the correct digits will reveal a more accurate result. If you do not have all of your financial information at your fingertips, it is a good idea to start gathering it. Doing so will help make the mortgage calculator results more accurate. You’ll also need all that information for the mortgage application, so collecting it together sooner rather than later is a good idea.
If you are interested in learning more about getting a mortgage you can afford, call Northwood Mortgage™ at 888-492-3690 or contact us here.