Free mortgage calculators help you to determine your affordability
published on January 26, 2010
What is the role of free mortgage calculators in finding out your affordability? Mortgage calculators play an important role in determining how much you can afford. These are important financial tools that assess your financial condition and hence your repayment capacity. You can access these calculators online for free. There are websites that offer its visitors free mortgage calculators.
Let us find out why these calculators are so important. It is a well known fact that mortgage payments are determined by a number of factors and each of these influence payments in a different way.
An example of how free mortgage calculators can help you
For instance if you are accessing free mortgage calculators online and you are undecided about how the mortgage rate of interest will affect your payments each month, you can use the mortgage rate of interest calculator. It will help you to find out what your payments will be if you opt for fixed-rate mortgage as compared to ARM or adjustable-rate mortgage.
If you find that you are comfortable with the change in payments that take place if you opt for adjustable-rate mortgage, you can opt for the same; else you opt for a fixed-rate mortgage which makes your payments predictable as the rate remains constant throughout the term of the mortgage.
In this way mortgage calculators will help you to find out your monthly mortgage payments and how much you can afford. Similarly, you can use free mortgage calculators to find out the size of the mortgage you should take out, the amount you have to pay in case of a 15-year and 30-year mortgage etc.
You can use these mortgage calculators online to find out the following
• How much should you earn so that it can support your mortgage payments
• DTI or debt-to-income ratio calculator to find out how much you are already paying each month to pay off debts.
• Which is better – renting or buying?
• The total cost of the mortgage –Mortgage APR etc. Depending on your affordability, decide the size of the mortgage you can take out, the payments of which you can afford without defaulting.
Contributed by MortgageFit Community
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