Guest Post by Jessica Bennet
A mortgage calculator is that financial tool that helps you in determining the affordability as it calculates the monthly payments. The mortgage calculator provides you with all of the details on the mortgage like the monthly payments against the mortgage, the interest rate payments, and the time which will be taken to pay off the home loan, the exact date when the loan will be paid off and so on. Because the mortgage calculator helps you to find out the affordability based on which you will be able to take out a mortgage, it naturally gets easier for you to choose the right kind of home for yourself. There are different types of mortgage calculators which are available online.
Importance of using mortgage calculator
There are various factors that influence your mortgage payments. All of these factors are your affordability and income, the interest rate on your mortgage, the loan term, the debt to income ratio, the mortgage APR. So, the mortgage calculator helps you in using all of the items that affects the mortgage and therefore helps you in finding out the details of your payments. Thus, you are able to decide beforehand if you should at all take out a mortgage and if so which would be the best mortgage for you.
Different types of mortgage calculators
There are different types of mortgage calculators and some of these are:
1. Cost calculator – The cost calculator is that type of mortgage calculator that helps you in finding out or in calculating the entire cost of taking out a mortgage and thus the costs of buying your home.
2. Monthly payment calculator – With the help of a monthly payment calculator you will have the opportunity to calculate the mortgage payments which you will be required to make each month as installments against the mortgage. If you use this mortgage calculator you will be able to know in advance the amount which you will be required to pay.
3. Repayment calculator – If you use a repayment calculator, you will be able to determine the repayment amount on a mortgage and the other payment details as per the changes of the repayment term.
4. Interest only mortgage calculator– As there are different kinds of mortgage, there are different types of mortgage calculators too. Sometime you can have the option to take out a mortgage which will require you to make payments on an initial basis only on the interest for a certain period. Now, it becomes important for you to calculate the interest payment and the interest only mortgage calculator is the one that helps you in finding out the payment details of the interest only mortgage.
5. Adjustable rate mortgage calculator – There are mortgages on which the interest rates are not fixed, the interest rate adjusts or changes from time to time. So, if you use the adjustable rate mortgage calculator, you will have the opportunity to calculate the amount that you will be required pay towards the adjustable rate mortgage.
Then there is also the amortization calculator which helps you in understanding how your payments results in amortization of the mortgage. With this kind of calculator, you will easily be able to know in which way the monthly payments help in the reduction of the term of your home loan. This calculator also helps you in understanding the details of how the monthly payments are divided as the payments towards the principal and payments towards the interest. If you can have the clear idea on how the payments amortize the loan, you will be able to adjust the payments in that way to pay off the loan fast enough. If you increase your monthly payment you will be able to pay off this home loan much faster.