TOP 20 MORTGAGE CALCULATOR TIPS

A mortgage calculator can be a valuable tool for anyone looking to buy a home or refinance their mortgage. It can help you understand the financial implications of different mortgage loan options and decide what type of mortgage is best for you and your budget. It allows you to enter several variables, such as the price of the home, your down payment and interest rate and then calculates the monthly mortgage payment and total cost of the loan. For example, you can find our free online Graphical Mortgage Calculator here and our Loan Calculator here.

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While a mortgage calculator can be a helpful resource, it's essential to understand how to use it effectively to get the most accurate results. There are many factors to consider when using these calculators, and it's essential to understand how variables such as the loan amount, interest rate and term can impact your payment and overall mortgage costs. In this article, we'll share 20 best tips for using a mortgage calculator to help you make better decisions about your mortgage.

1. Know your budget
   Before you start using a mortgage calculator, it’s important to understand your budget well. This includes your monthly income, expenses and debts. Don't forget to factor in all your other debts when using the mortgage calculator. When deciding whether to approve your mortgage loan, lenders will consider your debt-to-income ratio, which is the amount of your monthly debts compared to your monthly income. Knowing how much you can realistically afford to pay each month will help you use a mortgage calculator to find a loan amount that works for you.
2. Know what information you need
   To use a mortgage calculator effectively, you'll need to have some basic information on hand. This includes the amount of the mortgage, the interest rate and the term of the loan. You'll also need to know your down payment amount, if you're making one, and any closing costs you'll need to pay.
3. Start by calculating your monthly payment
   One of the primary uses of a mortgage calculator is determining your monthly payment on a given mortgage. To do this, you'll need to enter the mortgage amount, interest rate and loan term. The calculator will then provide you with an estimate of your monthly payment.
   
   Use a mortgage calculator to understand how much home you can afford. You can do this by trying different loan amounts, interest rates and loan terms and seeing how they affect your monthly payment. For example, increasing the loan term from 15 to 30 years will decrease your monthly payment but will also increase the total amount of interest you'll pay over the life of the loan.
4. Experiment with different down payment amounts
   The down payment amount, also known as the deposit, will greatly impact the mortgage amount you can afford. A larger down payment means you can qualify for a larger loan, which can be beneficial if you're looking to buy a more expensive home. However, a smaller down payment also means you'll have to pay private mortgage insurance (PMI), which can add to your monthly expenses.
   
   The size of your down payment can also significantly impact your monthly payment and the overall cost of your mortgage. Use a mortgage calculator to see how different down payment amounts affect these factors.
5. Factor in closing costs
   In addition to your down payment and monthly mortgage payments, you'll also have to pay closing costs when you take out a mortgage. Closing costs can include fees for items such as appraisals, title searches and legal services. Make sure to factor in these costs when using a mortgage calculator, as they can significantly impact your overall borrowing costs.
6. Use a mortgage calculator to compare lenders
   Different lenders offer different mortgage rates and terms, so it’s essential to shop around and compare offers from multiple lenders. Remember that a lower interest rate can significantly impact your monthly payment and total interest paid. A mortgage calculator can help you compare offers and see which lender will give you the best deal.
7. Compare different mortgage types
   Many different types of mortgages are available, including fixed-rate mortgages, variable-rate mortgages and government-backed loans like FHA and VA loans. A fixed-rate mortgage has an interest rate that remains the same throughout the loan term while the interest rate on a variable-rate mortgage can change over time.
   
   Each type of mortgage has its own set of terms and conditions, and it’s essential to compare them to find the one that works best for you. A mortgage calculator can help you compare different mortgage types and see how they affect your monthly payments and overall borrowing costs.
8. Compare different mortgage terms
   The mortgage term is the length of time you have to pay off your loan. Most mortgages have terms of 15 or 30 years, but you can also find shorter or longer terms depending on your needs. A shorter mortgage term means higher monthly payments but lower overall borrowing costs. A longer mortgage term means lower monthly payments but higher overall borrowing costs. Use a mortgage calculator to compare different mortgage terms and see how they affect your payment.
9. Adjust the interest rate
   The interest rate on your mortgage will greatly impact your monthly payments and overall borrowing costs. A higher interest rate means higher monthly payments and more expensive borrowing, while a lower interest rate means lower monthly payments and less costly borrowing. Use a mortgage calculator to see how different interest rates affect your payment.
10. Consider the biweekly payment option
    Many mortgage calculators offer a biweekly or fortnightly payment option, which allows you to make payments every two weeks instead of once a month. For example, our free online Fortnightly (Bi-Weekly) Mortgage Calculator can be found here. This can be an excellent way to save money on your mortgage, as it can help you pay off your loan faster and reduce the overall interest you pay.
11. Include property taxes and insurance
    In addition to your mortgage payments, you may also have to pay property taxes and insurance on your home. These costs vary widely depending on where you live, so it’s important to factor them into your budget when using a mortgage calculator.
12. Check for additional fees
    Some mortgages come with additional fees, such as application, origination, valuation and service fees. Check for these fees when using a mortgage calculator, as they can add to your overall borrowing costs.
13. Consider the impact of mortgage insurance
    If you put down less than 20% on your home, you'll likely be required to pay for mortgage insurance. This insurance policy protects the lender in case you default on your loan. It can add significantly to your monthly payments, so it’s important to factor it into your budget when using a mortgage calculator.
14. Consider refinancing
    If you have an existing mortgage, you can save money by refinancing a new loan with a lower interest rate. Refinancing can help you lower your monthly payment and save on interest over the life of the loan. A mortgage calculator can help you compare the costs of your current loan to a refinanced loan and see if it makes financial sense to refinance.
15. Consider the impact of inflation
    Inflation is the gradual increase in the general price level of goods and services over time. If you take out a mortgage, it’s essential to consider the impact of inflation on your borrowing costs. A mortgage calculator can help you see how much your monthly payments and overall borrowing costs will increase over time due to inflation.
16. Calculate the impact of extra payments
    If you can make extra payments on your mortgage, you may be able to pay off the loan faster and save money on interest. Use a mortgage calculator to see how making extra payments affects your monthly payment and the overall cost of the mortgage. For example, you can find our free online Loan Reduction Calculator here.
17. Calculate the total interest paid
    A mortgage calculator can help you see how much interest you'll pay over the life of your loan. This can be useful for comparing different mortgage offers and seeing which one will be the most cost-effective.
18. Use the amortization schedule
    Many mortgage calculators provide an amortization schedule, a table showing your monthly mortgage payment broken down into principal and interest. By studying this table, you can see how much of each payment goes toward paying off your loan and how much goes toward paying interest. This can help you understand how your mortgage works and see how different payment options will affect your borrowing costs. For example, you can find our free online Loan Amortization Calculator here.
19. Check for prepayment penalties
    Some mortgages have prepayment penalties, also known as early repayment penalties, which means you'll have to pay a fee if you pay off your loan early. Check for prepayment penalties when using a mortgage calculator, as they can add to your overall borrowing costs.
20. Get professional help
    If you're having trouble understanding the results of a mortgage calculator or are unsure about which mortgage is right for you, it’s a good idea to seek the help of a professional.
    
    A mortgage lender or financial advisor can provide valuable guidance and help you make an informed decision about your mortgage. They may be able to give you a more accurate estimate of your mortgage payment and a clearer understanding of the full terms of your mortgage loan.

In conclusion, a mortgage calculator is a powerful tool for anyone looking to buy a home or refinance their existing mortgage. It can give you a reasonable estimate of your monthly mortgage payment and help you compare different options. However, remember that a mortgage calculator only gives estimates, and your actual mortgage payment may be slightly different due to factors such as property taxes and insurance. By keeping these tips in mind, you can get the most out of a mortgage calculator and find the right mortgage.

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