Sometimes big sometimes the very big and sometimes HUGE amount is invested in buying a home. This means you cannot be careless for even a minute. Buying a home is an influential decision that affects other aspects of your life. For saving a deposit you do compromises on desires, look for cheaper deals while buying grocery, clothes, furniture, etc. Maybe you are not buying a home for the first time but moving to a new home or remortgaging. Whatever it is, these financial adjustments are focussed for your ‘sweet home’. It is a once in a lifetime decision that demands investment not only of money but also of emotions, time and patience.
Most of the chances are that you do not have money to pay the whole amount on your own. The backing of a mortgage becomes necessary but you cannot just go and tell a lender to give you a mortgage. There are so many calculations to make, so much detail is necessary and countless estimations are there. To do that with maximum precision, you need a tool that can ease the mess of these calculations.
Mortgage calculator helps you tackle the figures
Of course, it is not possible to keep a record of big amounts on a pen and paper. Calculators are required and absolutely unavoidable. They help you get the estimation of the total as well as monthly cost of the mortgage. According to that, you can figure out what adjustments you need to make to handle the big figures of the mortgage. Your monthly budget and other living expenses take a new shape to adjust with the new obligation.
Your need decides the type of calculator
In mortgage calculator, you cannot work on the ‘one-size-fits-all’ approach. For varied needs, the types of calculator change.
The major types are –
- Calculator for the first time buyers
This is as you can see is to help if you are a newcomer in the world of home buying. This calculator gives you answer of many questions like –
- How much can I borrow?
- What will be my monthly instalment?
- What will be the stamp duty?
- What is the loan to value percentage?
- How rate change will affect my loan?
- Calculator for moving home
This is used when you plan to buy a second home and the existing mortgage shifts to the new home. You may also need to borrow an additional amount. This calculator becomes your accountant to tackle all the calculations.
- Calculator for remortgaging
This is for two situations – 1) your mortgage (existing) is coming to an end 2) you want to borrow a bit more.
- Buy to let the calculator
When you are buying a property for investment purpose to rent it out. This also helps get the idea if a property is of worth or not.
What personal information you need to provide?
Not many things are necessary to mention but just a few basic details. These are –
- Annual salary
- Partner annual salary (if applicable)
- The amount you want to borrow
These basic details are required in every calculator whether you apply to a direct lender or to the high street lenders of Bank of Scotland mortgages. Stay sure about each and every information you fill as this is the only data a calculator considers. However, you can always change the details according to the need, but at least stay confident about the bigger picture. More precise and perfect you stay while using a calculator, more clarity you can expect in the result.
How to use a mortgage calculator in 6 easy steps?
Now when you know what information you need to provide, it is good to know how to use it.
- Enter the price of the property you want to buy
- Enter the amount you want to borrow
- Select the tenure in the number of years
- Enter the interest rate
- Calculate mortgage
- Get your monthly instalment amount
There may be a little change in the steps depending on the lender, but more or less, the process is the same.
Things that you should know before using a mortgage calculator
Financial decisions and actions should always be backed with the right information. You should always know how to use a financial tool and get its maximum benefit.
Below are the points and facts about the mortgage calculator. Have a look –
- The mortgage results you get, depending on the type of mortgage you enter.
- The estimated cost you get through the calculator is according to the details you enter. It has nothing to do with the affordability check. That happens on the later stage, which can change the figures for the total cost.
From the mainstream Lloyds loan calculator to a direct lender loan calculator, the estimations are always helpful. You get the outline of a bigger picture and then you can draw and complete it by drawing on that outline.
A mortgage calculator is your tool to play safely in a game that is complicated and long-term. Use it well and it can help you make smart decisions. Are you ready?