Crunch figures with a mortgage calculator!

If you’re buying your first home, a mortgage calculator is a great tool.  And guess what?  It’s not like you have to go to an office supplies store and buy it.  Just go on the Net - there are hundreds of them.  Money lenders and mortgage brokers ensure that potential clients can calculate how much money they’re going to spend, so a mortgage calculator is a “must have” on their web sites.  This service must be simple and user-friendly, so that users don’t scratch their heads trying to figure out how to use it.

Mortgage calculator:  basic components

 Here are some of the elements that go into a mortgage calculator:

• Cost of the house
• Down payment
• Monthly mortgage payments that homebuyers are willing to make
• Monthly income of potential homeowner
• Interest rate
• Number of years – or term of the mortgage

While there may be other sophisticated components built into a mortgage calculator, the above are the basic ones.

Because they’re so simple to use, it would be surprising if anyone complained that they’d rather have their banker calculate the figures because the online mortgage calculator does not work.  Even a high school student who has no intentions of buying a home can work it out.  It’s been refined and re-tooled. 

It does not matter whether you’re applying for a bad credit loan mortgage or a refinance mortgage loan – a mortgage calculator can give you a rough idea of the monthly “damage” you’re supposed to shell out. 

And remember, your input is your output.  What we mean by this is, if your dream home is priced beyond your budget or your means, the mortgage calculator won’t lie to you.  Depending on the term of the loan and your annual income, the mortgage calculator may come up with astronomical monthly payments you would have to make.  An $800,000 home in a plush neighborhood will generate monthly payments that can make you dizzy.  They stretch longer than a lifetime; sometimes with mortgage payments, people feel they have to live to two lifetimes to pay off the house.  Remember too that for the first two to three years of your mortgage, you could just be paying interest, without considerably reducing your principal.  And there is such a thing as an interest only mortgage calculator, which might be a good thing to use before you start hunting for that dream house.