Benefits of Mortgage Calculators

Mortgage calculators can be crucial for people who are looking into buying a home. While it is nice to think that people can buy a house without having to deal with a mortgage, most people who buy a home require a loan. The numbers and equations in obtaining a mortgage are enough to confuse anyone. Many people simply talk to their mortgage broker or the lender to try to figure out exactly how much a mortgage will cost them. There is a way to be informed on the mortgage as a first step to making any decisions. By using a mortgage calculator, you can figure your payments and basic costs. There are various calculators which can help you in any number of calculations.

What Calculators are available?

There are calculators available for almost any purpose you can imagine, below is a basic list available for mortgage purposes.

• Debt Consolidation Calculator – Work out the benefits of consolidating your debts.
• Cost Calculator – Work out how much it’s going to cost you to buy your house.
• Repayment Calculator – What are your repayments going to be?
• Borrowing Calculator – How much will a lender offer you? This is usually a very general calculator. The only definitive way to assess this is the speak to your lender or mortgage broker.
• There are also calculators for car loans, calculating balloon payments, the effect of extra repayment, lump sum repayments and many other purposes.
Know What You Can Afford

The first major benefit of a mortgage calculator is the ability to figure out what you can afford. While many people know what they can afford as far as monthly payments are concerned, they are unsure how interest and everything else plays into the numbers. The mortgage calculator gives you the luxury of playing with the interest rate, amount of deposit, and loan term to figure out what you can afford, and how to arrive at the loan amount that you can afford.

Know What Small Changes Do to your Payment

The next benefit is the simple idea that the mortgage calculator allows you to play with the numbers at will to understand how changes affect your monthly payment. By playing with the different numbers you can figure out the best way to get what you want in a realistic way.
Know your Price Range

When buying a house people often find they are unsure of how much they can afford. How does Interest rate or deposit impact the price they can afford to pay for a house? What is the maximum purchase price? Some people believe they can pay a certain amount, but can actually pay more. Being informed will allow you to buy better and give you an advantage when negotiating with the vendor.

Do Mortgage Calculators have limitations?

Mortgage calculators are a fantastic resource as a first step to securing a mortgage or buying a house. The simple nature of a calculator is also its greatest limitation; there are many factors to consider in obtaining a mortgage that a calculator does not cover. For example, a calculator does not look into your credit worthiness or the impact a credit default has on the interest rate, or the amount you can afford. It also does not consider or have the ability to work out exact loan costs for your particular situation. Mortgage Calculators should be viewed as a first step asset to obtaining a mortgage, but know they have their limitations.

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Mortgage Calculators and Refinancing Your Mortgage

Many years ago when interest rates seemed to be declining almost every day, I attempted to determine the exact point I could benefit from refinancing my home mortgage. At first I search the internet for a mortgage calculator that could aid me in my decision, but to my disappointment I discovered that they all lacked the sophistication necessary to be of much use.

In fact they were so seriously lacking in their complexity that they were nearly financially ineffectual. So after frustratingly realizing I was not going to find what I needed, I decided to build my own mortgage calculators and in 2005 I transferred them to a browser format making them available to the general public. You can try my mortgage calculators at Mortgage Calculators.

Determining the economic benefits of refinancing depends on many factors, i.e. 1) what is the rate on your existing loan, 2) what is the current rate at which you can refinance, 3) what will it cost you to refinance, 4) how long do you expect to hold the property hence hold the loan, and 5) what is the time value of money. My website RealEstate-Calc.com can help guide you through a step by step approach in the application of these variables.

When creating any financial calculator or model there is a trade off between complexity and simplicity versus effectual and ineffectual and striking the right balance is the key to being a good analyst. "Mathematical modeling", "manipulation of numeric data" and "displaying numeric results" are all part of an art form! To think otherwise would produce less than superior results.

Most mortgage calculators leave out the ability for the user to adjust for how long they expect to hold the loan and none that I know of allow the user to adjust for the time value of money. Most do not allow the user to adjust for a mortgage that has already been amortizing for a significant period of time.

How do I do it? I combine 20 years of experience as an analyst on Wall Street with the following skill sets: coding in visual basic, yield curve construction, financial statement preparation, business plan development, complex derivative valuation, and risk management. I am a CPA in the state of New York.

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How much house can I afford?

Buying a home can be a trying task. It is not necessary that the first home you buy has to be your dream home. Nevertheless, it calls for lot of cool headed calculations. There are many factors that are considered. The first thing that you are required to do is find out how much house you can afford. You can use the "how much house can I afford" calculator. Once you are confident with your finances you should take the plunge and buy a house. The mortgage calculators can be of great help if you want to find out your home affordability, interest rates, monthly mortgage payments, loan term, whether opting for FRM will benefit you or opting for ARM will be a better option.

The prevailing mortgage rates are low and if you have enough cash, you can buy a home. Many houses are also facing foreclosure. Reports suggest that Memphis (Tennessee) is a good place for making real estate investment. The real estate market in Memphis has shown a steady rise in employment and the houses that are facing foreclosure are being sold for a dollar range of USD$40,000 to USD$60,000.

The mortgage market has shown signs of revival but the pace is almost negligible. There is however, an air of optimism in the financial markets. The sale of single home units have increased, if not remarkably but comparatively. President Obama introduced the Mortgage Bailout Plan to help homeowners who are facing foreclosure. His Make Home Affordable plan is expected to bailout as many as 4 million to 5 million homeowners.

Mortgage Bailout Plans are usually introduced by the government when the real estate market is in a bad shape and needs a boost to recover. The mortgage bailout program introduced by Obama Administration in February 2009 failed to yield desired results as it addressed the needs of homeowners with primary mortgages. So, only those homeowners who qualified for the program were able to enjoy the benefits of the program.

In order to extend help to homeowners with second mortgages, President Obama introduced an expansion of the Make Home Affordable Plan in which the homeowners with 2nd mortgages will enjoy reduced interest rates and payments. It has been decided that every homeowner will be in a position to pay 1% less towards interest rate payments.

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