A Mortgage Calculator Can Help When You Are Buying A Home


Everyone would have faced the situation of borrowing money by keeping their property like a piece of land or a house as collateral. This process of mortgaging is a complex process and it requires a lot of planning in deciding the parameters like the amount needed to be borrowed, interest rate to return the money, time to return the money, etc. A mortgage compare can come in handy in these situations.

These calculators are nothing but simplified calculators to decide upon the various mentioned factors involved in the process of mortgaging. It has a simple interface, and instead of numbers, this calculator has parameters like the amount, interest rate, term in years, monthly payment, total payments, total interest, prepayment type, prepayment amount, start with payment, savings etc.

Mortgage amount is nothing but the amount expected out of the property which is kept as a mortgage. Interest rate means the rate at which the amount borrowed on the property has to be repaid. Term in years is the number of years in which the amount has to be repaid.

Total interest is the amount to be paid above the original amount loaned in the given time period. This is given by a simple formula, I = cN - P. Here, P is the principal balance, c is the amount paid every month and N is the number of payments to be made. The resulting value is the interest or simply the extra amount paid on the mortgage over the principal.

Prepayment type is the frequency with which the borrowed money has to be repaid. Normal options are monthly, yearly and onetime payment. Prepayment amount is the amount paid at the beginning of the mortgage period. Savings denotes the amount saved by paying the prepayment amount in the beginning.

These calculators are used by all the sections of the people, but, it is extensively used by real estate owners who are commonly involved in the process of mortgaging. It helps real estate owners in investing in the right areas by finding properties which can reap good dividends in the future. One of the important situations at which these calculators are of immense help is when people finance a part of their newly purchased home by mortgaging.

Conventional calculators can help people in deciding on their parameters, only in limited scenarios. In recent times, these calculators have evolved and more complicated analyzers have been developed to help people in dealing with complex parameters like changing interest rates over the years and help them in their mortgaging process in a variety of scenarios.

In recent times, people depend a lot on internet and web based data to decide on their mortgages. They compare different rates, scenarios, read experiences from different websites etc before going for a mortgage. This was not the case a decade back. This has resulted in people extensively using online calculating widgets and scripts which can be embedded in their blogs and websites. These online widgets and scripts have made things lot easier when discussing about a mortgage calculator online.