Don’t Let Your Dream Become a Nightmare
| June 18, 2010 | Posted by Roshawn Watson under Uncategorized |
By: Samantha Lewis
If you are in the market to purchase a house by getting a mortgage or planning to refinance your existing mortgage, you should strongly consider running the numbers with a mortgage calculator to accurately determine what your financial liabilities will be. Traditionally, you want your principal, taxes, insurance, and interest to be less than 28% of your gross income on a 30-year fixed mortgage. Personally, I prefer a more conservative benchmark of your mortgage being no more than 25% of your net income on a 15-year traditional mortgage. Using mortgage calculators can help prevent you from becoming house poor, so your income is free to pay off the home and build wealth.
The following article is a guest post by Samantha Lewis from Mortgage Fit. If you find this article useful, please consider subscribing to her site and reading her other mortgage-related articles.
Best Mortgage Calculators refer to those mortgage calculators which not only help in estimating the payment on a new mortgage loan, but also offer alternative uses. Best Mortgage Calculators can serve various purposes and can help you to solve different mortgage related issues.
The Various Purposes for which you can use Best Mortgage Calculators
- If you are going to take a home loan, then the Best Mortgage Calculators can calculate the overall costs along with the monthly payment amount. So, in advance you can judge whether you will be able afford a particular home mortgage loan. This, in turn reduces your risk of taking the loan.
- In case of late payment, using Best Mortgage Calculators you can calculate the increase in the amount of interest payment.
- If you are considering mortgage refinance in order to get the advantage of low interest rate, the Best Mortgage Calculators can help you in determining the net savings that you are going to incur.
- If you have taken a 30-year fixed rate mortgage loan, but want to pay it off much earlier, then you can do that by making extra payments towards your loan. The Best Mortgage Calculators can help you to find out how you can reduce the loan term and for that how much extra amount you will be required to pay each month. Using the Best Mortgage Calculators you can also determine how much you are actually going to save if you make extra payments towards your loan on a monthly or yearly or one-time basis.
- When you took the home mortgage loan, may be you were compelled to buy a private mortgage insurance policy. If you are still paying the insurance premiums, then you can give a second thought to the matter. If you have gained 20% equity in your home, then you can request for the cancellation of the private mortgage insurance policy. The Best Mortgage Calculator can here effectively help you in deciding whether 20% equity has been accumulated in your home.
- If you are thinking of taking a mortgage loan and weighing the various mortgage loan options, then Best Mortgage Calculators can help you in taking a solid decision. If you are confused between a 20 year fixed rate mortgage loan and a 30 year fixed rate mortgage loan, then you can enter respective interest rates with respective loan term in the Best Mortgage Calculator and can get a competitive picture. The Best Mortgage Calculators shows the required amount of monthly payments and the amount of overall interest payment in case of both the loans. After considering the values you can thoughtfully decide on the loan type.
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Copyright 2012, Roshawn Watson, Pharm.D., Ph.D. All Rights Reserved.
I wish we could take every high school student and show them how to use these calculators! Just focusing on the one that calculates how much home you can afford would have saved this country a lot of pain. I noticed also that there are general debt calculators as well including one for consolidating debt. This could help people pay off their high interest credit card debt with debt having a much lower rate of interest.Good post!
I agree. I use financial calculators constantly now, but I only used them rarely before learning how valuable they were. In other words, my use is a relatively recent development.
I bought a house last year and those mortgage calculators are a must. I had to make sure and calculate all extra expenses like taxes, insurance, homeowner dues, maintenance to make sure i got the right property for my budget
You are so right. It's so easy to only look at the sticker price and not realize all the total costs that goes into home ownership. Since this purchase greatly affects your cash flow (your most powerful wealth building tool), it's worth spending a little time with these calculators to figure out the true cost of home ownership, which includes PITI, maintenance, dues, etc like you did last year.Regards,Shawn