Everyone desires that level of security that is only attached to having a home and never having to pay rent. Your desire to own a home is not wrong and should be pursued in the right way. In truth, the continuous expenses like school fees, rents, electricity bills, transport fare and all the others that we have to attend to may not allow us to save up enough to get ourselves a home- this is the exact reason why a less stress-inducing method called mortgage has been designed just so that our desires can come to fruition.
A mortgage is a unique form of loan characterized by its security, where the reason for borrowing the money is specified both to the lender and the borrower. It is often used to purchase fixed assets like a piece of land and house among other things. In the arrangement and agreement, the lender has the right to dispose of the assets if payment is not duly made. But, the asset is registered in the name of the borrower.
As you search for a mortgage, it is advisable to be intentional about the home that you can afford because you will not just have to worry about paying the loan amount. You are also obliged to pay annual property taxes, homeowners insurance, and sometimes mortgage insurance.
All of these factors are what you need to add up monthly and pay if you want to stick to a reasonable mortgage plan.
To add these factors, you need to function accurately and with precision. This is why technology has designed a perfect complement for your brain. A device called the mortgage calculator. Mortgage calculators are machines that have been engineered to help users determine the home they can afford, compare rates, contribute to comprehend the perks of paying some extra amounts and also teach on how to save so that they can spend more on principle. The structure of the mortgage calculator and calculations.
Before the modern time and the introduction of technology (current calculator), those who had their interest centered on total comprehension of their mortgage transaction focused on using compound interests rate tables. These tables had a unique functioning system.
It was working well but not without some compilations as a basic knowledge of compound mathematics was required to operate the tables. This is very different from how mortgage calculators work. A mortgage calculator also needs the user to enter the fundamental questions regarding the impact changes in mortgage variables available to everyone, and the answers are swiftly provided by the calculator.
Because the world is now mobile than ever, an online mortgage calculator has been engineered for anyone interested in making all transactions online.
- Online, an intending borrower is at liberty to inquire about the time of home his earnings monthly can be able to afford.
- The lender is also allowed to compare the borrower’s monthly income to there monthly loan debt online.
The above processes is a clear representation of the inquiry process. All of which can be achieved just by using an online mortgage calculator. The online mortgage calculator is also functional in the area of paying mortgage cost in addition to other associated housing costs like property taxes and homeownership dues.
Properties of a mortgage calculator
No maintenance cost
A mortgage calculator has no cost like maintenance costs or refurbishment landlord insurance. But, it has been characterized to test different loan types and interest rates.
It has a monthly formula based on;
R – the interest rate generally expressed in decimal and not in percentage. It is simple to deduce. The monthly percentage rate is the year’s percentage divided by 12.
Divided the monthly percentage rate makes r- the interest rate.
N-this is the number of payments required monthly. Another name for the amount of monthly payment is called the loan’s term.
P – this is the name of the amount borrowed. Another name for the borrowed amount is known as the loan’s principal.
Mortgage calculator came through for so many confused homeowners and has since helped them to solve fundamental mortgage problems between the lender, the borrower and the amounts to be paid monthly. It is even more comfortable to use in this time and age where everything can be done online.