Mortage Calculator Guide
Free Mortgage Calculator- Install different variables, then click the Calculate Button
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The words “mortage” or “morgage” are the two most common misspellings of the real word “mortgage”. If you misspelled it as “mortage”, you may have sounded out the word and did not hear the letter “g” and therefore missed putting the “g” in there. Likewise, if you misspelled it as “morgage”, you probably have sounded out the word and did not hear the letter “t” in there. Don’t feel bad as it is probably a word that is misspelled as often as it is spelled correctly.
A Mortgage Calculator is a very important tool to use when you are considering buying your first home. It gives some ideas about how much house you can afford. Most lenders will look at your monthly home mortgage loan amount to monthly income amount ratio needing to be in the ball park of about 30%. This figure is used to determine the amount they are willing to loan you.
For an example, let’s say your monthly household income is $5000. Let us also say that the bank is willing to lend you up to 30% of $5000 for a loan payment amount, that leaves you the other 70% of your monthly income to comfortably pay other essential bills for such things as food, clothing, utilities, etc. So, 30% of $5000 would calculate out to be a $1500 per month for a house payment. The next two important variables we need to look at are the length of time you will need to pay the loan back and interest rate you are going to get from the lender. Obviously, these two variables are something many borrowers shop around for to get the best combination.
The amount of time you need to pay the loan off might be 20 years, 25 years, or 30 years. Lets go with the 30 year loan repayment idea as this might be the best option unless you are close to your retirement years. Also, let’s assume for now that you are able to lock in a 6.00 % interest rate on your mortgage loan.
Using a mortgage calculator you can plug all of these variables in and it will tell you how much money you will be able to borrow, which will give you an idea of how much house you can afford.
With the right mortgage calculator, you would plug the three variables in from the above example, i.e., a $1500 per month payment, a 30 year time period, and a 6.00 % interest rate. These variables plugged into a mortgage calculator will give you a loan amount of approximately $250,000.00.
There are other thing to consider here. Let’s say, the lender requires 20% down from you and they are willing to give you the other 80% towards the purchase of your new home. And you have the 20% cash to put down on the new home. This calculation will show the purchase price of your new home as follows.
If the lender is willing to lend you the 80% of the price of a new home, and the 80% is equivalent to $250,000, let’s solve for the price of a home that you can afford. You simply take the loan amount which is $250,000.00 and divide by .80, and it will equal approximately $312,500.00 home that you will be able to afford.
Lenders have gained so much experience over time lending to home buyers that they know how much they can safely lend to them.
Their statistical lending guidelines keep them safe from lending a borrower too much money so that the borrower will not easily get into trouble.
This protects the lender from a bad loan, and also protects the borrower from getting overextended. A win-win for everyone.
A small percentage of borrowers do get themselves into trouble sometimes.
For more information also see bad deals.
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Tagged With home mortgage loan, interest rates, monthly household income, monthly payment, Morgage Calculator, Mortage Calculator, Mortage Calculator Guide, Mortgage Calculator
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Just a quick message 2 thank you 4 your useful webpage. Do u know where I could find more on this? have a nice day. Melanie x
Thanks for your kind comments.
Check back again in a few days, I should have a new post for you to look at.
Also, another site you may want to visit for more related info is investmentcalculatorhelp.com
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