DIYrevolucion.com

There are a variety of free mortgage calculators available on the Internet. These can be useful for determining how much home you can afford, whether to buy a home or continue renting, and what your monthly payment will be. Here are descriptions of a few different calculators.

What Can You Afford

Before you go house searching you may want to know how expensive of a home you can afford. An affordability calculator will take a look at your income, all your debts (auto loans, credit card debt, etc), taxes and insurance for the new property, and information about the loan itself to determine the maximum loan amount you might be able to obtain.

Monthly Payment

Your monthly mortgage payment is made up of a variety of costs, including principal, interest, taxes and insurance. A payment calculator considers all these and gives you your actual monthly payment. This is an important figure to know when determining whether or not you can afford a loan. Remember that even if you’re able to obtain a loan, you still have to make the monthly payment.

Rent or Buy?

Another great tool allows you to see how much money you’ll lose or save by renting, and how large a benefit buying a home might be. You’ll be able to change the number of years used in the calculation. So for example, if you were planning to buy a home and then sell it in five years, and you wanted to know if that was better than renting for the next five years, you’d put a “5″ into the appropriate field in the form. In this case you might see that you’d save $80,000 in monthly payments if you rent, but that you’d make that up and earn an additional $5,000 when you sold your house. So if you were able to pay the larger mortgage payments now, you’d end up better off after your house sold.

Refinancing Your Mortgage

Refinancing can save some homeowners money, but it can also cause them to lose money. Using a refinancing calculator can thus help you to make a wise choice. For example, if you were to refinance and then sell your home five years later, you might save $1,500. If you waited a total of 10 years, the savings would be $4,000. If you waited 25 years, you might in fact lose $7,500.

Which Loan Should I Choose?

Mortgage lenders provide different loan products from which to choose. It’s important to compare the products to see which have the lowest monthly payment and which will end up costing you the most over the life of the loan. A calculator that helps you do this might take into account closing costs, interest rates, and points. Most calculators probably don’t consider mortgage insurance, so be aware of this when looking at a loan that requires it.

Bi-Weekly Payments

Will making a mortgage payment every two weeks save you more money than paying once a month? A calculator can tell you this. You’ll be able to see how much interest you’ll save and how much sooner you’ll pay off the loan. A good calculator will take into account the fact that you’ll lose some tax savings by paying off the mortgage sooner, and will give you a “net savings”.

Using some or all of these mortgage calculators can help you make a better decision regarding buying or refinancing a home.