Properties cost a great deal of money and for most people, it is a purchase that needs to be paid off over a number of years. For many first-time buyers, it is not unusual to take out a mortgage over a 25 or even 30-year term. However, since all lenders charge interest on your homeowner loan, it can be difficult to determine exactly how much money you will need to repay each month.
A mortgage calculation is something that is carried out to determine how much you will need to repay each month of your mortgage. This will be based on various factors including:
- The value of the property that you wish to buy
- How much you can offer as a down-payment
- The term of your mortgage (in months/years)
- Depreciation value
- The interest rate offered by your lender
Mortgage calculators are available on the websites of most major lenders as well as mortgage brokers. Our mortgage advisor will also be able to provide a manual calculation for you.
Getting your mortgage calculated should be a significant priority for any homeowner since it offers a variety of benefits. These include:
By far the biggest benefit of a mortgage calculator is that it can help you budget your monthly expenses. Not only do you have to be able to afford to keep up with your mortgage repayments each month, but you also have to factor in all the other ‘running costs’ associated with home ownership. This includes paying your utility bills, local taxes, any HOA fees and any month to month maintenance costs. Many homeowners try and ensure they keep some money back each month for unexpected maintenance or repairs that may be required, such as a sudden need for a plumber or to fix a broken window. On top of this, you also need to have funds left in the pot to cover living expenses such as food and gas or public transport.
When you get your mortgage calculated you will know how much you can realistically afford to spend on repayments each month, and this will help you to make informed decisions when it comes to house hunting and finding the right property. This can prevent you from over-committing on a purchase and then struggling to stay within your budget each month.
Protect your new home purchase
When you take out a mortgage, your home loan is secured against your new property. This means that if you fail to keep up with your repayments, your lender can choose to repossess your home, potentially leaving you with nothing to show for the payments that you did make. However, by ensuring that you can afford your monthly mortgage repayments, you can ensure that your new property remains in your possession. This gives you added security as well as the opportunity to build equity on your purchase.
Get the best value mortgage
With so many lenders and mortgage options to choose from, you could be forgiven for being overwhelmed. Nevertheless, a mortgage calculator can make the process of deciding which mortgage product is right for you far easier and less stressful. By calculating variables such as interest rates, amortization (the gradual reduction of debt over the period of the loan) and how much of a down-payment you can afford, you will be able to determine which mortgages represent the best value for you.
If you would like more information about the benefits of mortgage calculations, or if you have recently had your mortgage calculated and you are ready to start looking for a property in San Diego and would like the support of an experienced team of realtors, please don’t hesitate to contact us and get in touch.