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.