| A mortgage calculator can help you determine a lot | | | | expenses come with a bigger home. |
| about your financial situation. The main reason for using | | | | Another thing to beware of is PMI (Principal Mortgage |
| one is to figure out how much a mortgage will cost | | | | Insurance). The bank charges PMI until you've paid |
| you so that you know if you can afford the monthly | | | | 20% down on the home. The reason for this is the |
| payment. | | | | security of the bank getting their money back. If you |
| The first step is to figure out your borrowing power | | | | buy a $100,000 home and owe $95,000 then the bank |
| with the bank. This is the amount of money the bank | | | | will have a difficult time getting all of their money back |
| will loan you based on your income, or marital income. | | | | if you fault the loan. However, if you only owe $80,000 |
| The bank calls this your debt to income ratio. They | | | | then they will most likely be paid back in full. Less risk |
| factor in all your monthly payments and come up with | | | | for the bank means less money for you. |
| an amount of money that they feel you should be able | | | | The last thing to beware of are interest rates. They |
| to afford. | | | | have ARM rates, fixed rates, interest only loans and |
| Then you need to start looking for a home in the price | | | | more. Check them all, the meaning of them all and their |
| range they give you. You should beware of a few | | | | current rates. They will all be different and offer |
| things. When the bank tells you the amount you can | | | | different perks for different situations. They are all |
| borrow, it includes the monthly mortgage payment, | | | | explained on The Free Mortgage Calculator website. |
| taxes, insurance and if the there's a condo fee. So if | | | | You can also use a free mortgage calculator to |
| you just look at the mortgage payment then you'll think | | | | determine your borrowing power with the bank. |
| you can afford a lot more than you actually can. Also | | | | This will be the biggest investment of your life so |
| make sure to factor in all the new expenses you'll incur | | | | make sure you find all the deals you can with a |
| because you're most likely upgrading and more | | | | mortgage calculator, interest rates and negotiation! |