Budget Planning with Mortgage Calculators
By Karen LawsonHome Worth Columnist
Web View
Free online mortgage calculators can help you evaluate many aspects of buying a home and getting a home loan. Mortgage companies provide these calculator tools so that you can do some planning before you look for a mortgage or search for your dream home. Popular mortgage calculators include:
- Affordability: This calculator uses information such as your present income, monthly debt payments, estimated mortgage amount, and interest rate and analyzes it in accordance with typical underwriting standards. Underwriting is the process mortgage companies use to qualify applicants for a mortgage.
- Amortization: Use this calculator to determine how and when a mortgage loan will be paid in full. This calculator produces an amortization schedule showing how much of each principle and interest (P&I) payment is applied to the mortgage amount (principle balance) and how much is applied to interest. There are also mortgage calculators that prepare amortization schedules for ARM loans, but you'll need to know specific information about a particular ARM loan in order to get correct estimates. Mortgage companies can provide estimated repayment schedules for ARM and other "exotic" mortgage loans.
- Monthly payment: You've found the house of your dreams, but can you afford it? You can use a payment calculator to help you decide if your dream home can potentially become a nightmare. You'll want to consider potential interest rate increases in addition to initially low "teaser" interest rates.
- Refinancing: If you want to refinance, this mortgage calculator can help you compare your current mortgage to the terms and closing costs of your new mortgage.
Source
Fannie Mae
About the Author
Karen Lawson is a freelance writer with extensive background in mortgage banking. She holds BA and MA degrees in English from the University of Nevada, Reno.
