Real estate transactions are filled with dense, wordy documents and terms that are over the head of the average homebuyer. Someone looking to purchase a home is unlikely to understand the details of their mortgage or closing documents. One under-appreciated tool in assisting a homebuyer on their journey to ownership is a good mortgage calculator.
Many people are unaware of the power a mortgage calculator provides. It may not be able to answer all of your in-depth questions the way that a mortgage broker can, it certainly allows you to keep an eye on you budget from the very beginning. Using one means you enter the mortgage process with factual information, knowing exactly how much you can afford to spend each month. This information will allow you to be informed and prepare for your new mortgage payment along with planning for other household bills, such as utilities, taxes, groceries and credit cards.
The mortgage calculator, in effect, becomes your price comparison tool, by which you can compare mortgage terms and interest rates from the comfort of home. You have the ability to see which potential lender is the most affordable for you and how much money they can save you per month or annually.
A good mortgage calculator can help you by allowing you to include not just the basics like house price and interest rate, but also costs such as home insurance payment, property tax rate, and, if applicable, homeowners association dues. These numbers may seem small in comparison to the full price of a house. But they can be important when determining the home you can afford.
A home buyer with an income of $60,000 per year and ten percent down could afford a home of about $270,000. But this price assumes fairly affordable homeowners’ insurance and taxes, and no homeowners association (HOA) dues. If these “extra” costs of homeownership rise, affordability falls. Lenders consider your entire monthly payment amount when qualifying you for a loan. Using the example of the buyer who makes $60,000 per year, when we will increase the extra costs of homeowner’s insurance, $300 per year, property tax of 0.2% per year and HOA dues of $100 per month the affordability drops by about $30,000 in home price. This is important to know ahead of time, which is why mortgage calculators are such useful tools.
Setco’s mortgage calculator can help you plan for a purchase or refinance, view your amortization schedule, you can even create and email instant estimates. We pride ourselves at being the #1 Title Company in the Florida Panhandle and this is just one of the many services we offer to home buyers, and sellers as well as real estate and mortgage professionals. We offer customized services to meet the needs of all parties, click below to learn more about what we can do for you.