A mortgage can mean a lot to any person in the professional domain and if you are a contractor who is on the lookout of an increased income or an elevated list of possible pursuable ventures, then a good mortgage deal can work out tremendously for you. The attainment of a good mortgage deal is never straightforward though; if you don’t follow the right path, don’t make friends with the right people and don’t show patience while making decisions, then you can find it a fairly steep mountain to climb.
There are many ways you can plan ahead on your mortgage and there are many ways via which you can make things turn out just fine for you. For example, if you hire a mortgage broker with adequate experience, then you can end up having to do close to nothing to attain your deal. On the other hand, if you end up lending money from a lender who is not very contractor friendly then you might find yourself in financial trouble soon. Most people do find themselves wanting answers to cumbersome questions during their repayment tenure and many of those boil down to the fact that they didn’t give their decisions any forethought.
A good way to plan for your mortgage tenure is by using a mortgage calculator. It’s a tool that’s largely famous among contractors and many people like to estimate the payments that they will have to make in relation to their new mortgages. Apart from calculating mortgage payments there are other venues of help that you can get via a mortgage calculator but this article is limited to the help it provides regarding mortgage settlements.
You can find mortgage calculators on the websites of many banks and financial institutions that intend to make their lives of their customers easier by giving them the opportunity to know what the future holds for them. Some mortgage brokers also provide these calculators for free so you won’t have a hard time looking for them. A mortgage calculator should ideally be able to figure out the amount that you will have to pay on any potential mortgage. The information that you will have to enter normally comprises of:
1.The value of your property. This value needs to not only be a viable figure but it should also incur any hidden costs or values like damage or good will etc.
2.The amount of your down payment.
3.The term of your loan.
4.The expected depreciation value.
5.The interest rate that you have agreed upon.
Now that we know what a mortgage calculator is and how it functions, let’s discover how we can actually use one. There are numerous benefits that are shared towards the end of this article but you won’t be able to attain any if you aren’t aware of how to use. Here are some of the things that can be guaranteed by a state of the art calculator available at many online websites:
1. Accuracy: The mortgage calculators available at credible websites beat everything else when ti comes to accuracy. They are famous for producing close to perfect calculation results. Because of the fact that they are automated, the chances of getting errors or mistakes are very slim. You do have to be extra careful while you enter the data into the calculator. Gone are the times to write your own formulas on papers or of old calculators.
2. Independence: When you are actually pursuing the attainment of a mortgage, things can be very troubling and cumbersome as you have to rely on many people to get your work done. However, while using a mortgage calculator, you won’t have to worry about dependence. You won’t need any external help while making your calculations and you are absolutely free to choose the lender that you want and only choose the deals that benefit you more than them.
3. Rate comparison: There are thousands of lenders willing to give you the most enticing mortgage deals but unless you are able to compare the prices of many of the deals, you won’t be able to find the right mortgage for you. With the advent of these sophisticated online tools, you will be able to make the rate comparisons a lot easier. So choosing a lender will now be a lot simpler and swifter.
4. Variables: You will also be able to know about all the variables that can be changed with the help of these fine mortgage calculators. All the questions that you might have regarding affordability will also be easily answerable when you use a mortgage calculator.
5. Time and money: here is no need to say that you would actually also end up saving a lot of money once you use the calculator. The best part about these calculators is that they are available for absolutely free and you just have to log on to any website to spot one. If you want to go the extra mile though and want to purchase any programs then of course you will have to pay.
Let’s now look into some of the things that can actually be found out once we know our way around a mortgage calculator:
If you have attained an IT contractor mortgage and are planning to pay it early, this section is for you. If you have a mortgage that’s fixed rate and spans over a period of 30 years, then for a typical mortgage holder, the total interest payments will end up amounting to a lot more than the original principal that was paid on the loan. Can a mortgage calculator help you in this regard? Yes, it can. There is a “Extra payments” option in most of the calculators and you can use that to find how whether you can cause your term to shorten and actually get a lot of savings by parting with some extra money that enters the principal of your loan after the end of each month, each year or just once if you want too.
To be able to calculate the savings that you can bag, you would need to make the entry of a hypothetical amount into any of the monthly/yearly or one-time payment categories and then move over to the show section and click on “Recalculate amortization Table”. This will display to you the interest that you will have to pay and also your new payoff date(s).
An ARM is also known as an Adjustable rate mortgage. IF you get a lower initial interest rate on it, then that can be very tempting for you at first but whilst this might seem appropriate for many reasons to many borrowing parties in the start, some find the low initial rate to not be good enough as it won’t make cuttings to their monthly payments as much as they would like.
In order for you to get an idea of how much your initial saving is going to be, you need to enter the ARM interest rate into the calculator and also remember to leave the term to 30 years. After you do that, go ahead and make the comparison with the payments that you get after you enter the rate that would be covered by a 30 year fixed rate mortgage that is more conventional in nature. When you are done with this, you will be able to confirm your initially set high hopes about the possible ARM benefits or could also end up bursting your bubble by showing you the real picture.
There is another exciting advantage of using the mortgage calculator. You will be able to determine the exact time when you will actually have an equity of 20 percent in your home. This percentage will be the magic number when you make the request of waving the requirement for a private mortgage insurance, to a lender. To do this: follow these steps:
1.Begin by entering your mortgage’s original amount and the data that you ended up closing.
2.Now click on show/Recalculate amortization table.
3. Now you will proceed by multiplying the original amount of your mortgage by 0.8 and then match the result to the nearest number present on end up reaching the 20 percent equity target.
Now that we have looked at some of the ways, we can use a mortgage calculator and make life easier for ourselves, let’s look at some of the benefits that can be ensured by using it as well. There are many tangible benefits and some of them are mentioned below:
A mortgage calculator goes a long way in the bid to help you find your payments. With the advent of digital technology, we have been able to make a lot of things automated and convenient for mankind. The internet has introduced all sorts of life-changing tools to our lives and people are appreciative of the fact. Financial goals are all that separate a prudent man from a procrastinating careless one. Some people dream to have their own homes while others can’t even envisage that. In order to fulfill dreams, many people resort to taking loans because they don’t have any other options available at their disposal. In order to do that, you will have to consult all sorts of lenders, read through many different articles and in the end, compare the quotes to discover what the best you can do is. This is where a mortgage calculator can help you dearly. Let’s know exactly how:
It really goes without saying how much a mortgage calculator can help us while we are planning our budget. The tool will allow you to make anticipations regarding your budget and you will be able to figure out whether or not you can afford a house in the longer run and how much you will have to save for that. They also provide you the assistance via which you can analyze and make decisions accordingly while you are looking to land a house or conduct search for any other property.
One excellent feature along with this is that if you see that you are not on the right track if you have to save to buy a home, then these calculators will allow you to also know how much you should actually save to be on the right path.
Like we already mentioned, mortgage calculators can help you save all sorts of money. When you manage to calculate the variables that include (but are not limited to) down payments, amortizations and interest rates, you will be able to determine the options that will represent the best value for you. This is an invaluable asset during the negotiations of a mortgage.
When you actually experiment around with a lot of scenarios, you will understand how the mortgages actually work. You will be able to get your head around the processes and the criterion around which the banks and other lenders revolve their calculations around. This will also allow you to formulate your repayment periods more extensively and you will be able to know the maximum interest rate that would be affordable for you. Thus, these calculators would in turn help you in negotiating your mortgage terms.
These calculators would let you save so much time that you would never resort to not using them while looking for mortgages ever again. Because you will be able to carry out the calculations all by yourself and you would be able to make borrowing capacity estimations, you won’t have to waste time on consulting bankers or brokers just to check your qualifications out. These calculators will provide you with the ability to make all the comparisons side by side and actually evaluate multiple scenarios as well.
Now let’s take a look at some of the types of mortgage calculators out there. Most of them have all the functionalities but there are some differences between them that are tangible. A basic calculator would allow you to figure your monthly payments out but there are many other possibilities when you get a hold of more sophisticated ones. Read on:
1.If the calculators have the functionality of borrowing capacity, you will be able to make borrowing capacity calculations as already mentioned above. This will depend on your contemporary situation and will include factors like liabilities, assets, expenses and income among other things.
2.The amortization over time functionality: Some of the calculators would be able to depict the effects of depreciation on all of your payments that you are set to make over the period of time along with the total loan cost that will be summed up towards the end of the term.
3.Additional payments: You will also be able to calculate the effects that additional repayments have on your deal. This will also include knowing how increasing the payment amount will affect how you pay your mortgage down faster.
4.Compensation: Some calculators also allow you to find out the costs that will be applicable to prepayments depending on your mortgage plan.
5.Premiums: Some extra-sophisticated calculators can help you in determining the applicable premiums on your deal as well.