Mortgage Calculator – There to Answer Your Questions By SeanHorton At Isnare.com Ezine Articles

A mortgage calculator is there to help you. It isn’t a substitute for a human being, but it can provide some of the basic information you need.

Actually, however, the term “mortgage calculator” isn’t as simple as it sounds. There is a wide variety of calculators designed for a variety of needs. Whatever question you have about a mortgage, or your financial situation in relation to a mortgage, there is a good chance there will be a mortgage calculator to help you.

So what questions might a mortgage calculator be able to answer for you?

• I’ve seen a house I like – can I afford it? The calculator tells you to put in the price of the house and the required deposit. It will tell you the amount you have to borrow at a selected rate – e.g. the current base rate or the rate on offer – in order to buy the house.

• What is the maximum amount I can borrow for a mortgage? This is a simple calculator based on your income to give you a basic idea of what you can afford, in order to give you guidance as to what price-bracket you should be looking in. But don’t forget there’s no guarantee that a lender would actually give you that amount – they take other things into consideration such as your credit rating and your other commitments. (A few calculators actually enable you to enter your commitments and regular outgoings as well.)

• How much would I have to pay out a month on this loan? The calculator enables you to put in the amount you want to borrow, over how long and at what interest rate. It the gives you the monthly payments for an interest-only or a repayment mortgage.

• What would be the effect of a rate change on my repayments? With this calculator you can work out how much more or less a month you would pay in the event of a rate change. You enter the details of your mortgage – amount, rate, term etc. – and then click on increased rate or reduced rate.

• Would it be worth my while to take advantage or this good remortgage deal, given the amount of the redemption fee? This can be very helpful. Sometimes you are tempted to remortgage at a good rate but are uncertain whether the redemption fee would cancel out most of your savings. The calculator works out the maximum interest rate you would need to be paying in order to make a switch worthwhile.

These are just some of the mortgage questions a mortgage calculator may be able to help you with. As you see, most of them are very simple. They give you an indication of the direction you should take, but can’t take into consideration all the factors involved in the costs of a mortgage. Everybody’s situation is unique. If you are in any doubt, talk to a whole of market mortgage broker who can look at the complete picture.

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