# What is a Mortgage Calculator?

A document that specifies a particular amount of money that is used for the procurement of a property or house and a lien is placed on the property as a security for the repayment of the debit is called a mortgage. You can get a mortgage from almost anywhere – banks, financial institutions, building societies and even mortgage brokers.

A mortgage calculator is a used to assist the debitors (in this case home buyers) to calculate their monthly mortgage payments by using the principal, rate of interest and term as the variables. This helps the real estate owners (both current and prospective) to check how much loan they can afford to purchase a property.

A mortgage calculator can also be used to get a comparative cost between the interest rates offered by the various lenders and thus to determine the impact on the length of the mortgage loan of making added principal payments or bi-weekly instead of monthly payments. Besides the mortgage calculator is a programmed tool that helps the consumer to see the fiscal repercussion of changes in one or multiple variables in a mortgage financing arrangement.

The key variables are:?

* Loan principal balance
* Periodic interest rate compound interest
* The total number of payments in a year
* Total number of payments
* Regular payment amount

Financial calculators like HP-12C, Microsoft Excel sheet and the Web all can be used for the purpose of a mortgage calculator.

Home Finance of America has a few calculators that help the consumers with their financial queries. An affordability analysis can be achieved in a number of ways and the calculators discussed below can assist them to evaluate effects of the different variables when purchasing a house.

* The RENT Vs BUY CALCULATOR – this program helps the consumer to get a comparative study of renting an apartment and buying a house.
* The MORTGAGE QUALIFICATION CALCULATOR – this program shows the user how much income is required to buy a home based on salary calculations and other factors.
* The MORTGAGE PAYMENT CALCULATOR – this calculator provides the details of the consumer’s mortgage payment for the loan term.
* The REFINANCE CALCULATOR – this one actually helps the borrower to determine whether it is the correct time to refinance.
* The DEBT CONSOLIDATION CALCULATOR – debt consolidation calculator shows the consumer how can he reduce his monthly payments and hence save money.
* The MONTHLY PAYMENT CALCULATOR – this one permits the users to look at the various options when there are changes in the loan balance, the mortgage term and the rate of interest on the monthly principal and insurance payments.
* The CREDIT GRADE – as the name suggests, this one helps the debitor to assess his credit grade.

Did you know?

* The best mortgage calculator is the Microsoft Excel. Try out the function PMT and you will be amazed by the result.
* Mortgage calculators are very useful in budgeting and bargaining – use one of these to calculate all the options that your lender offers. Some creditors will give 0-2 discount points with variations for different mortgage terms; some others give more discount points up to a set maximum.
* A mortgage calculator will also help you in negotiating mortgage points. Buying mortgage points lowers your rate of interest. In a typical situation, for every mortgage point you buy, your interest rate will come down by 0.125 percent. A mortgage calculator will help you to evaluate how much are you saving every month.

# Yes, It’s a Great Idea to Turn to a Mortgage Calculator

A mortgage calculator is a beautiful thing. Of course, you might think that we’re just being over the top. On the contrary, you future homeowner you — using a mortgage calculator might be the smartest thing that you’ve ever done, right up there with deciding to ditch those rent payments and invest in your family’s future. This is a tough decision that’s been made even tougher as credit markets freeze up and lenders start getting nervous. While this doesn’t mean that it’s impossible to get a mortgage, it does mean that your lender is looking at your application with a bit more scrutiny — and denying you on small things that might have been overlooked in the past.

This is where your mortgage calculator comes in, actually. Instead of worrying about whether or not you can really afford that mortgage payment, you’ll be able to find out in a flash.

Now, at this point you might think that there’s really no need to go with a calculator — after all, the bank has already preapproved you for a certain amount after a lengthy mortgage application.

Not so fast.

Just because you’ve been preapproved — that is, that the lender has told you how much house they will help you finance — doesn’t mean that you should go out and get that much house. That’s a good way to find yourself in foreclosure land before you’ve even gotten to enjoy the benefits of owning a home.

Using a mortgage calculator is pretty easy. You fill in the first field with the total amount that you are having financed. Now, this isn’t always the total amount of the home — after all, you should have a down payment, right? Right. You will need to enter in the down payment as well. Along with these two fields, you will need to make sure that you note the interest rate. If you don’t have it, you can always estimate.

Plugging in the numbers isn’t the hard part. It can be hard to realize that you really can’t afford the house that you ultimately wanted in the first place. It’s better to know that the numbers don’t work. After all, you have to calculate in maintenance — there’s no landlord to call when the pipes burst, or when you have to replace rotted wood. If that wasn’t enough, you have to think about taxes and insurance — on top of principal and interest! Yikes!

Overall, using a mortgage calculator is really what’s necessary if you want to make sure that you have not only enough money for a mortgage, but for the rest of your life as well — get started today!

# Don’t Cheat The Mortgage Calculator!

When you’re trying to get into a home, you might have a lot of pressure on you. There are a lot of people that feel like it’s a serious sign of failure if they don’t get into the house that they first laid eyes on and bragged to everyone about finding. However, this is a trap that definitely takes you further and further away from your goals — and who really wants to be moving backward instead of forward?

You have to stop and think about the things that matter to you in a house and make sure that you stay within your budget.

Naturally, you’re going to run into a point where looking at your budget and looking at the numbers on the sheet describing your dream home really isn’t going to be enough information to really make one of the most important decisions of your life. You want to really make sure that you’re getting all of the information, and that means turning to the mortgage calculator.

Remember what we talked about at the beginning of this guide — the pressure factor? Now, you might be tempted to feed the mortgage calculator the right numbers that add up to you moving into your first choice home — even if reality says that you really can’t afford it. Some people — including overzealous agents and even your friends and family — will say that everyone plays with the numbers a bit.

Yet there are strong reasons not to try to cheat the equity release calculators. First and foremost, if something looks like it’s out of your budget — it usually is. Some people think that getting an adjustable-rate mortgage is the way to go if you can’t afford your home any other way, but that might not be the way to go — especially if you have any feeling that your income is going to decrease over the years rather than increase.

Another point that you will need to think about is that if you do play with the numbers and deviate from reality, you’re much more likely to do that on your official mortgage application — and that’s definitely a no-no. You don’t want to just jump in and get things that way, because if it’s found that you overstated your income — or understated your expenses, you are committing mortgage fraud. That is a very serious offense that can cause you to lose your home — the very last thing that you wanted!

So, if you take nothing else from this guide, take this: don’t cheat the mortgage calculator and make sure to avoid credit card debt!

# A guide to remortgages

Three years after the financial meltdown, the road to recovery is still a slow process. Government initiatives attempted to kick-start the economy but the average homeowner is understandably nervous about the future. Reducing costs and maximizing equity have become the norm, with the individual dusting off their trusted mortgage calculator to decide if the time is right to remortgage.

The bursting of the housing bubble in 2008 was long overdue. Trusted financial institutions had taken on unsustainable amounts of mortgage debt bundled into seemingly attractive packages. Property was hot and lenders were keen to highlight the benefits of owning your own home as opposed to renting.

The increase in home ownership led to an ascending spiral of house values that, conversely, led to a decrease in the interest rates of lenders. Savings could now be pumped into property and provided that mortgage obligations continued to be met, everything in the garden looked rosy.

Hindsight shows that this didn’t last. Properties were overvalued, lenders were forced to increase interest rates and many homeowners found themselves in financial difficulties. Saving money became the new goal and prudent lenders could now offer homeowners an alternative to selling their property through remortgages.

At its simplest level, a remortgage is paying off your current mortgage in full to your existing lender with funds obtained from another, using the property as the security for the new loan.

Remortgaging is occasionally confused with the term refinancing. If the homeowner chooses to raise capital through a refinance loan, this can be obtained from the existing lender whereas a remortgage involves taking a loan from an alternative mortgage provider. Taking out a different product with the same lender is not a remortgage.

By switching lenders, the homeowner can look to secure a more favourable interest rate and reduce their monthly payments on the property. The process of remortgaging can also serve to release equity by raising the capital to cover other short-term debt or even allow for home improvements. Equity is calculated as the difference between the market value of the property and the amount still owed to the original lender.

The process of remortgaging is not overly complicated. Like an original mortgage, it requires an application and paperwork. It will probably involve a valuation of the property and will certainly be dependent on proof of income and any other debt.

There are, however, some issues to be considered before remortgaging.

Firstly, your current lender will have put some penalty clauses or redemption fees into your original contact. These could be draconian during the first year, as the lender will have wanted to confirm the long-term nature of the agreement. It would be prudent to add up these penalties to see if remortgaging is worthwhile.

Secondly, the new lender will not rely on your original survey to provide a valuation. They will require that the property is re-assessed for its current market value and will offer the remortgage based upon that valuation. Some lenders may offer this for free to make them seem more attractive, but you should always expect to incur some costs if you decide to remortgage.

Finally, there is the issue of who to choose. There are numerous lenders who are looking for business and again, similar to the original process, it may be wise to shop around for the best deal. You should also think about using an independent third party to search for comparisons but there are a plethora of Internet resources that can point you in the right direction.

It may have been only three years since the bubble burst, but an investment in bricks and mortar is still a sure way to feel financially secure. A remortgage could be the next step in maintaining your independence.