Dream Home Mortgage Calculator: A boon for the nascent home buyers!

Are you planning to buy your dream home for the first time?  If so, then you may be a little nervous to find out the amount of mortgage you can afford to buy that dream home.  Most people may not be aware that their monthly mortgage payment is not only the loan amount but it is inclusive of the annual property taxes, homeowners insurance along with mortgage insurance.

Therefore, your mortgage payment is determined on the basis of all the above factors, plus principal and interest.  But keeping all the above factors in mind, it can be really difficult to calculate your monthly payment.  So a mortgage calculator can be beneficial for you to calculate the total amount you need to pay in a month. You can find a mortgage calculator on the Internet and it can help you determine your mortgage payment with ease.  A good calculator can help you compare the rates, so that you can get the best deal for your dream home.

Here are some of the points that can help you understand why a mortgage calculator is beneficial in buying your dream home.

Mortgage Calculator – It can help you understand what you can afford:
You can effortlessly understand what you can afford to take out, so you can avoid getting into the trap of debt.  If you submit the required details like the price of that dream home, the interest that you can afford to pay, annual property taxes along with mortgage insurance, then you can estimate the amount you can afford.  Your home mortgage calculator can help you estimate your total monthly payment.  As a result, you can estimate the amount you can afford to take out to avoid financial set back in future.

It helps you compare the mortgage rates:
Recently, consumers are really smart as they’re equipped with modern technology that helps them to get the best deal.  Modern technologies like Internet and smart phones can help you calculating your monthly mortgage. The young home buyers are constantly using the on-line mortgage calculator from their smart phones or Internet to get the best deal from their loan providers. These people are constantly comparing the rates with other loan providers. When they compare the rates, they get the best deal from the loan providers. So, these calculators have become popular from time immemorial.  But still, only a few young people are making the right use of this gadget.  Therefore, a calculator can help you get the best deal between adjustable rate mortgage and fixed rate mortgage.

Helps you understand whether it is beneficial to pay off the loan early or put a large down payment upfront:

A good mortgage calculator can help you calculate how much you can save over the life of the loan for your dream home, should you put some extra down payment, make bi-weekly payments instead of monthly payments or pay more towards the principal balance each month.  Therefore, you can make your own choice in how you want to pay off the mortgage.  A good mortgage calculator can help you illustrate the break ups.  It can also help you understand the benefit of minor changes while you pay off the loan.

Therefore, you’ll want to increase the use of a mortgage calculator to buy a new home, refinance your current dream home loan or if you’re planning for a reverse mortgage.  If you’re well aware of the rates, then you can effortlessly choose the best deal for yourself.

Different types of calculators available on-line:
Here are some different types of home mortgage calculators available for your requirements:      
Cost Calculator:  The cost calculator can help you calculate the entire cost related to your dream home.

Monthly payment calculator:  A monthly payment calculator can be beneficial for you to estimate your payment that you need to make to pay off your dream home loan. Therefore, you can be well aware of the amount you can manage to pay in advance.  In fact, it can help you understand whether you can afford to take out the loan.

Repayment Calculator: You can estimate your dream home monthly repayment balance with the help of a repayment calculator.

Adjustable rate mortgage calculator: You can effortlessly know the amount you need to pay towards an adjustable rate mortgage of your dream home.  In adjustable rate mortgages, the interest rate starts from a low percentage and increases in due course of time.  Therefore, the calculator can help you estimate your monthly payment in relation to fluctuating rate.

Amortization schedule calculator:  You can understand how your monthly payment reduces your loan over the course of the loan term. You can get an explicit break up of your payments toward the principal and interest.  Therefore, you can increase your monthly payments with the help of this calculator if you wish.  You can pay off your loan faster if you increase your monthly payment on your dream home loan.

In conclusion, the above calculators can help you provide a better picture of how much mortgage you can afford among other things.  If you’re aware of the different types of calculators and their use, then you can get the best deal out of your dream home according to your needs today.

This article has been contributed by Sam Stokdale, a financial writer specializing in mortgage. Immersing himself with the financial sector, he has covered topics including real estate investment, mortgage refinancing, lending and borrowing, managing finances and credit advice.

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