Find Out What Mortgage You Qualify For With a Home Loan Calculator
You can use a home loan calculator to find out what mortgage you qualify for. This kind of calculator is freely available on the web at no charge. By entering your annual income, savings amount and how much you can afford to repay you will be able to see how much a bank or lender will let you spend on a new home.
Before you use a home loan calculator it is important to read all the instructions and the disclaimer first. Calculations are usually based on standard lender rules so they are pretty accurate but not foolproof. After you have worked out what home loan you may be able to qualify for, take the figure to your loan advisor and ask them to work out a plan for you.
Here are some tips for using a home loan calculator:
How many people will be making repayments? If you and your spouse will be signing up for the loan enter your joint income, savings, and monthly debt repayments into the home loan calculator. Remember that you can total your income at an hourly, weekly, monthly or annual basis in many cases.
Start by entering your GROSS income amount into the home loan calculator. Next add in your single or joint savings amount. Follow this with the total amount of debts you repay each month. In most cases you don't need to insert commas.
Now decide on an income period and enter it into the home loan calculator. If you entered your yearly income in the first step, select 'annual' under the income period slot and the same for weekly or monthly figures.
What amount should be included under savings? Your savings are any monies that can be used to pay for closing costs or make a down payment on your home. If you have gifts or donated money, you can include this under savings in your home loan calculator.
Now you need to enter your debt payments into your home loan calculator. This is all the money you pay each month to cover debts like student loans, car loans, mandatory child support, and credit card payments. Credit card payments where you pay off a balance each month should not be included under monthly debts. Also if you are currently paying rent or a mortgage don't include these here.
Next you need to enter an interest rate amount. Generally, you can choose to retain the default amount or enter your own. It may be wise to use the default rate on your home loan calculator as this is calculated on the prevailing rate for a 30 year fixed rate.
Now its time to view the results screen on your home loan calculator. You may have the option to over-ride some of your choices and make a second calculation. You can usually change the required minimum down payment percent and some other choices not available on the first screen.
