| So you've decided to take the plunge into home | | | | can be when you input rates and the amount |
| ownership. Buying a home can be a complicated | | | | borrowed over time. Many calculators also project |
| process. Luckily, there are a plethora of online tools | | | | changes in the pay-off date based on any extra |
| that help determine how much you can borrow as well | | | | payments on the principle. |
| as the rate that you can qualify for, to name a few. | | | | A mortgage calculator can help you determine what |
| The first tool to use is a borrowing power calculator. | | | | kind of loan you can afford. There are two common |
| This tool allows you to input your income and financial | | | | types, the fixed-rate mortgage and an adjustable rate |
| obligations, from dependents and credit limit to income | | | | mortgage, commonly known as an ARM. The ARM is |
| and car payments. This information determines | | | | attractive in that it allows home buyers to qualify for a |
| credit-worthiness or gauges your ability to repay the | | | | larger loan by offering a lower interest rate at the |
| loan, thus determining how much you can borrow. Your | | | | outset. The bad news is that as the interest rates rise, |
| credit history in this area can determine the interest | | | | so does the monthly payment. Fixed-rage mortgages, |
| rates that you qualify for as well. | | | | allow you to lock in one rate for the duration of the |
| After you've determined how much you can borrow, | | | | loan, providing for a uniform payment. |
| can use a mortgage calculator to compare different | | | | In the long run, fixed-rate mortgages may be the better |
| types of mortgages. They can be found online and | | | | choice. They allow for stability while taxes, insurance |
| help you get an idea of what your mortgage payment | | | | and interest rates and home valuesfluctuate. |