| If you are investing in real estate you probably already | | | | months before they include it and even then it will only |
| know how to use a mortgage calculator. This article is | | | | be about 70-75% of the rental amount. The reason for |
| to show you the importance along with some tips to | | | | that is the average rental vacancy. |
| get the most money out of the bank as possible. A | | | | The bank works the exact some way for a second |
| mortgage calculator will help your figure out your | | | | home as they did for the first home when it comes to |
| borrowing power so that you can go to the bank | | | | your borrowing power. You have to compare your |
| knowing exactly what they will approve you for. | | | | expenses to your income and if you can afford it then |
| Banks actually work in a fairly simple way. They figure | | | | your should be approved. The third home is where it |
| out what you can afford for a monthly payment and | | | | gets a little bit easier because now you can add in the |
| then add in the current interest rate to figure out what | | | | rental income from the second home. |
| they can approve you for. Once they figure out that | | | | So if you can afford your second home with |
| number you can afford they have figured out your | | | | expenses of about $1,500 and you receive rent for |
| borrowing power. So why can't you do that on your | | | | $1,400 then you have really only taken $450 out of |
| own? | | | | your monthly borrowing power. You can include 75% |
| Find out what the current interest rates are for a fixed | | | | of the $1,400, which is $1,050, toward your income. So |
| rate mortgage and plug that information into a | | | | you add $1,500 to your expenses, but you also add |
| mortgage calculator. Then figure out what the monthly | | | | $1,050 to your income. |
| taxes are on your new home and add that to the | | | | Now if you can afford the $1,500 in the first place and |
| mortgage payment amount. The last thing you need to | | | | you have actually only spent $450 of your spending |
| do is play around with the loan amount until you find | | | | then you have the borrowing power to afford two |
| the monthly amount you can afford. If you know you | | | | more homes if you can buy them and rent them |
| can afford it then the bank should approve you for | | | | accordingly. |
| that mortgage amount. | | | | Keep playing around with the mortgage calculator to |
| So that explains your first home but if you are into real | | | | understand your payment options. Also make sure you |
| estate investing then this would probably be your | | | | use the most current interest rate in order to get the |
| second home. Well the first thing to know is that the | | | | lowest monthly payment and keep your borrowing |
| bank will not include your potential rent as current | | | | power available. |
| income. You must have the rental income for over 6 | | | | |