Mortgages can be confusing, especially for first time buyers.
How do you know if the interest rate is good? Are the monthly repayment costs affordable for your personal situation? Should you take out a fixed rate or a tracker rate mortgage? How long does the average mortgage last?
Indeed, these are all questions that a traditional mortgage broker, or nowadays an online mortgage broker, can answer. However, mortgages are likely to be the biggest financial commitment of your life, plus come with their own fees such as stamp duty, solicitor fees and valuation fees to name a few. So, the real question is, can you afford to pay for a broker or banker to simply assess if you qualify for a mortgage?
The answer is that you now don’t have to. With the rise of online mortgage calculators, both time and money can be saved by doing your own research. They can let you know what kind of mortgage you should apply for, whether you’re likely to be accepted, how much you could potentially borrow and also how much you would need to save if you’re still a bit short of the asking amount.
Sounds good for free, doesn’t it?
What Exactly is an Online Mortgage Calculator?
Mortgage calculators are available on most websites owned by banks and other financial institutions (anyone who offers a mortgage, really), plus most online mortgage brokers will offer this tool as well. They can help to figure out the amount that is paid on a loan by entering information such as the value of the property you’re after, how much deposit is required for said property, how long you’re willing to pay back the loan for and your optimum interest rate.
From this, you can get a better idea of how much you can afford to borrow from a lender and also of how much the monthly repayments are likely to be. This will allow you to assess whether you would be able to afford the repayments. This is especially useful if you’re opting for a tracker rate mortgage, upon which the interest rate on the monthly repayments pay rise. Mortgage calculators can let you know if you would still be able to afford the costs even if this did occur.
You can use the tool to enter the credentials of a loan deal you’ve seen on the market before applying for the deal to determine whether you’d be accepted. This can also help to enlighten the idea of what type of deal you’d need when searching for your perfect mortgage and comparing their costs. As well as this, most mortgage calculator tools will offer a “find me a mortgage” button, which will find a deal that is suited to your individual circumstance based on what you’ve put into the calculator.
How can Online Mortgage Calculators Save you Money?
Online mortgage calculators can save you precious pounds by calculating the many variables attached to mortgage loans. They will suggest the best interest rates for your situation as well as letting you know how much you’ll need for a deposit. These can both play a big part in gaining the best kind of deal, especially when negotiating with a potential lender.
Also, using this kind of tool before applying for a mortgage can help you to learn how such loans work. Having a higher understanding of the mortgage system can help you to identify the best deals and hence save you some money. Experimenting with different scenarios on the calculator can help you learn how mortgage lenders figure out their criteria, allowing you to fit perfectly into it when applying.
They can also help when deciding the repayment period that you want to opt for and the maximum interest rate you can afford. If you can afford it, having a lesser repayment term will save you money on paying interest. Again, knowing these things can help with negotiating an offer with a potential lender.
How Can Online Mortgage Calculators Save you Time?
By doing the calculations yourself, as well as estimating your own borrowing capacity, online mortgage calculators can save you time by not having to visit a traditional broker or bank. Often, visiting a broker or a bank can take time as they could take weeks to assess if you’d quality for a mortgage.
If you do qualify, the next step will be tedious paperwork and more wait time as they search for mortgage deals to suit your circumstances. Utilising online mortgage calculators can let you know if you’d qualify within minutes, as well as providing a range of deals to suit you via the “find me a mortgage” button. This can all occur within a couple of minutes, whereas traditionally, this process would have taken weeks.
Most online mortgage calculators will also allow you to compare different deals side by side after you’ve entered your details. Evaluating these different scenarios within minutes of entering your personal credentials will not only save you time, but money as well.
Other Benefits of Online Mortgage Calculators
Using an online mortgage calculator can aid with budget planning. They can help you work out the answer to questions such as whether your budget will allow you to buy a house and what your maximum asking price will be.
If it turns out that you cannot afford to buy a property at the current moment, some online calculators can suggest how much you’ll need to save before you’re in the right financial situation.
Online mortgage calculators can help you to make informed decisions on your house hunting process, saving you money spent on hefty interest rates and lengthy repayment periods and time spent dealing with traditional mortgage brokers and banks. These are a great tool for first time buyers and re-mortgagers alike. No one has time or money to waste, especially when they don’t need to waste it.