A Mortgage Calculator Should Give You More Than A Number

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When it comes time to take a look at getting a home mortgage, whether you’re looking at a refinance or if you’re looking to buy your first home, using a mortgage calculator can give you a lot of knowledge and understanding about what you’ll be looking for in a mortgage. Basic mortgage calculators let you put in the price of the home and the interest rate to get an idea of what your monthly payment is. But there are a lot more variables at play than just those two numbers.

More sophisticated calculators enable you to work with the different types of mortgages available. Talking to mortgage companies and getting numbers for all the variables involved gives you a complete picture of what you’ll actually be paying and when. Good fixed rate mortgage calculators enable you to input the price of the house, down payment, months to pay and interest rate to give you a monthly payment.

By playing with these numbers, you can eventually come up with a combination that gives you a monthly rate you can afford. Going to this effort enables you to know pretty much exactly what you’re going to be paying initially, how much your monthly payment is going to be and for how long.

While fixed rate mortgages are relatively easy to calculate because the rate of interest is fixed, adjustable rate mortgages, or ARMs, have rates that change over time. This can make a mortgage that’s affordable into one that may be too much to handle. By sitting down with a mortgage calculator can show you if you’ll be able to afford your mortgage when the introductory rate is over.

Not only will you be inputting down payments and initial interest rates along with the price of the house, you’ll need to know what the interest rate is going to change to in the future. Depending on whether the new interest rate is based on the original house price or whether it’s based on the amortized price of the house at that point in time, these variables add yet another level of complication to the process. 

While mortgage calculators are designed to give you numbers, the best thing they can give you is a much better understanding about your mortgage options. Having access to calculators that can give you a true month to month amount you’ll be paying; they’ll give you a complete overview of the life of the entire loan from initial costs, home equity as the loan matures and the eventual payoff amount. Make sure when you sit down to figure out your mortgage that you’re using a good mortgage calculator that’s designed to give you the help understanding your mortgage you’re looking at.

Before Victor Entrekin started looking for a house, he went online and found a mortgage calculator to see just how much house he could actually afford. Mortgage101 can help you find the lowest mortgage interest rates from hundreds of companies so you can get the house of your dreams.

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