| A mortgage loan calculator gives you a tremendous | | | | dream home. |
| advantage when negotiating a new loan with your | | | | 3. Should I Rent or Buy? |
| lender. If you want the best mortgage rates when you | | | | Remember the days when we were told that buying |
| refinance, nothing beats knowing how to compare | | | | a home is ALWAYS a good investment? Emotionally |
| offers you may get from different lenders or brokers. | | | | that's probably true. But it's not always the case |
| This article is loaded with tips on how to use a | | | | mathematically. Sometimes you're better off renting, |
| mortgage calculator to make sure you come out | | | | especially in uncertain times. |
| ahead before refinancing or modifying your loan. | | | | Here's how to know ... |
| Here are 3 common scenarios where using a | | | | First, understand you're going to be using your "best |
| mortgage calculator can help you decide what to do ... | | | | guess" estimates. But with a little research you should |
| 1. Should I Refinance? | | | | be able to come pretty close (most of the research |
| First, determine your main goal. For example: Are you | | | | simply involves presenting a couple of questions to a |
| more concerned with short term savings - (reducing | | | | knowledgeable realtor or property manager). Here are |
| your monthly payment now), or, do you want to save | | | | the questions on the home ownership side of the |
| more money in the long run? . | | | | equation: |
| For example. If you had a 30 year loan at 5% interest, | | | | What annual maintenance costs are typical for a |
| and you'd been making monthly payments on it for the | | | | home like this? What's the annual appreciation % I |
| last 5 years (60 months), you'd reduce your monthly | | | | could expect on this property? What % selling costs |
| payment if you refinanced for a new 30 year period, | | | | should I expect? What are the annual taxes and |
| say at 4.5%. | | | | insurance? What is the PMI (private mortgage |
| But you could still end up paying more over the long | | | | insurance). |
| run. The problem is you have no way of knowing that | | | | Your rental questions are much simpler. First, - how |
| until all the related expenses are factored in. And this is | | | | many years do you plan on being in the home before |
| where a mortgage loan calculator can help you. The | | | | selling? Second, how much is the monthly rental |
| calculator has places for you to input the various | | | | payment? And third, what is the annual rate increase |
| closing costs, fees, taxes, etc. And only after | | | | % expected to rent this home? Now you're ready. |
| considering all the related expenses will you know | | | | Using all the factors above a mortgage calculator will |
| whether or not you're coming out ahead. | | | | tell you -- 1. The total of the payments you'd make |
| 2. How Much Income Will I Need to Qualify? | | | | buying vs renting, 2. the total you'd save on rent, and, 3. |
| Nothing feels worse than finding the home of your | | | | the total home purchase benefits. This will help you |
| dreams and then being turned down when you try to | | | | make an objective decision based solely upon the |
| arrange financing. Once again, this is a case where | | | | financial implications. |
| using a mortgage calculator can really help. Wouldn't | | | | Other Uses |
| you rather know if you can qualify for the loan before | | | | Other ways you can use a mortgage calculator |
| you apply? | | | | include finding answers to the following: What would |
| Here's what you'll need to know ... | | | | the monthly payment be? What is the mortgage |
| First: the cost of the home; the expected interest rate; | | | | principal? What if I pay extra each month? Should I |
| the term of the mortgage (i.e., how many years?); and | | | | pay points to lower my interest rate? Which loan is |
| your down payment. This will show you the total | | | | better between two or more offers? What difference |
| monthly payment on the principal and interest. But | | | | would a bi-weekly mortgage vs. a standard mortgage |
| you're not finished yet! | | | | make? |
| Next, add in the annual property taxes and annual | | | | As you may imagine we haven't even "scratched the |
| insurance costs. Using all the above criteria the | | | | surface" of the many benefits of using a mortgage |
| calculator will tell you what your gross monthly income | | | | calculator. They can pay off handsomely. |
| needs to be in order to qualify for a loan on your | | | | |