When you’re buying a home, you’re probably going to need a mortgage from a lending institution. There are many things to consider, and it’s not something that should be entered into lightly. After all, a house is one of the biggest investments you will ever make. When you work with a broker or lender, they will use a mortgage calculator in Jacksonville or in other areas to determine how much you will pay and over what period of time.
As a borrower, you need to be mainly concerned with two things: how much interest you will be paying and whether or not you’ll be able to afford the monthly payments. Lenders use mortgage calculators to ‘play’ with the numbers to make your monthly payment something that you’re comfortable with.
For example, if you borrow $100,000 at 3% interest over 20 years, your monthly payment will be $554. If that is too much for you, then the lender can calculate the payment over 25 years. They could also switch to bi-weekly payments, which will cut the overall interest rate that you pay and thus lessen the amortization period.
Aside from telling you what your monthly payment will be, calculators can tell you how much interest you’ll be paying over the course of your mortgage. Advanced calculators use complex formulas to factor in things like home insurance, property taxes and even condo fees.
When you have detailed information and figures at your fingertips, you can plan ahead and budget your expenses. Don’t like the amount of interest you’ll be paying? Work with your lender to lessen the amortization, increase the payments, or put more money towards your down payment so you don’t have to borrow as much. This is a great tool to get you into your new home at an affordable price you can live with.
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