Understanding How To Use Mortgage Calculators

| July 14, 2015

The emergence of mortgage calculators has simplified and changed people’s perception towards home mortgage loans. Before the emergence of mortgage calculators, mortgage calculations were done using a laborious and complex manual method.

mortgage calculator

The emergence of mortgage calculators has simplified and changed people’s perception towards home mortgage loans. Before the emergence of mortgage calculators, mortgage calculations were done using a laborious and complex manual method. This method made people fall into the hands of corrupt and selfish mortgage brokers thus demoralizing prospective home buyers from acquiring mortgage loans.

With the current technological advancement and the emergence of mortgage calculators, you can be able to obtain financial data by a click of a button without seeking the help of mortgage brokers, and mortgage advisors. This, therefore, enables you to save time and costs related with loan repayment.

In understanding the theory behind mortgage calculators, it is important to analyze various aspects related to mortgage calculators. One of the aspects is the functions of a mortgage calculator. The main function of a mortgage calculator is to determine a borrower’s debt-to-income ratio. It also enables borrowers to determine their monthly repayment installments. Analysts recommend the use of a mortgage calculator by loan borrowers by virtue of it being able to perform a number of financial functions.

These financial functions include; a mortgage calculator enables you to distinguish between various break-even points in the event you are comparing refinancing costs with numerous lending sources, helps you to know the exact amount of money required to repay the loan and they also facilitate amortization calculation. Amortization calculation enables you to know your exact balance at any specific point within your term of payment.

There are various types of mortgage calculators that are used to perform various financial functions. Most users who use a mortgage calculator normally procured as handheld models. It is also possible to use an online mortgage calculator by visiting various online websites that provide such services. The UK mortgage calculator is the most popular handheld model that can be purchased from electronic stores or office products shops. However, some financial institutions have websites that provide clients with a free mortgage calculator online without the clients necessarily paying an upfront cost to use this service. This is mainly used as a marketing strategy in order to entice more clients to seek mortgage loans.

Keys are another feature that is related to mortgage calculators. A mortgage calculator has four keys that are used to calculate a mortgage payment. The percent key is often displayed as % in the mortgage calculator and is used to compute interest rates of the mortgage loan. The PV key is used to compute the principal value which is commonly known as your loan amount. The “N” key is used to calculate the number of years or months that are required for you to complete your mortgage repayment. Lastly, the PMT key is used to calculate the amount that you ought to pay monthly on your mortgage loan.

Different users use the mortgage calculator to perform various financial tasks. Most notable users of mortgage calculators include underwriters, debt counselors, loan processors, mortgage loan officers and homebuilders. Real estate agents who are known to provide mortgages at a fixed rate are known to use a fixed mortgage calculator to determine a buyer’s buying power based on the current interest rates and the buyer’s income.

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