Mortgage Payments Calculator: How They Make The Home Buying Process Easy

Cash buyers are very rare nowadays especially when it comes to making big purchases such as a house. This is why easy payment schemes are available for those who can only afford to pay off the item slowly over time. Houses are probably one of the biggest investments anyone would make in their lifetime.

It is also a purchase that we don’t often make which is why it is essential to do certain calculations before closing the deal. Knowing just how much we need to pay per month, and the term most suitable for our budget can help greatly in the buying process. This is where a mortgage payments calculator comes in.

What Does A Mortgage Calculator Do?

A mortgage payments calculator is an essential tool for buyers who wish to purchase a home. It can effectively calculate how much buyers can afford to borrow on an investment property. Mortgage calculators can help determine important elements to a loan such as the interest rates, payment schedules, costs, length of the mortgage, and principal payments. The great thing about the calculator is that everything is automated. Buyers won’t have to stress themselves out by making calculations themselves, or by having to go to the bank and ask for calculations. Plus, mortgage payments calculators are available online, so you can get the figures that you need with just a few clicks of your mouse.

Some Hidden Benefits of the Mortgage Calculator

Aside from finding out your loanable amount, there are other benefits that a mortgage calculator can offer you. Below are some of the extra perks that many people don’t know of:

Extra payments

Mortgage calculators happens to have an “extra payments” calculator, which helps you understand how much savings you’ll be incurring if you decide to pay more than your monthly amortization. Before dishing out your hard earned cash, you can already have an idea what’s in store for you by shortening the term of your loan. In order to find out your potential savings, just enter an amount into any one of the payment categories such as monthly, yearly, or one-time. Then click on the button “Show/Recalculate Amortization Table” and you’ll then see your new terms, how much you’ll save, and how much interest is left for you to pay.

Testing ARMs

Adjustable Rate Mortgages or ARMs can offer lower rates for you in the beginning, but it can be tricky at the same time because your interest rates can go up at the time when you are least prepared. In order to calculate your tolerance to risk, and more importantly, if you can still make payments even in the worst case scenario, you can again use the mortgage calculator. First of all, enter the interest rate of the ARM and set the term to 30 years. Then, compare your possible payments with a 30 year fixed loan. This can also help you determine whether it is a better decision to go with the ARM or if it’s wiser to stick with the regular 30 year fixed loan.

There isn’t just one calculator available for use. Other calculators include the debt consolidation calculator, cost calculator, repayment calculator, borrowing calculator and the buy to let mortgage calculator. Each of these serve their own particular purpose not only for the buyers, but for landlords and even for creditors.

These mortgage calculators can often be found on the web pages of mortgage lenders such as banks, credit unions and other financial institutions. Because of these automated tools, calculating your mortgage and estimating just how much money you will need is made so much easier.