What Should You Look for in a Mortgage Calculator?

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Published: 07th November 2012
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These days, you can't hop into a mortgage without dotting all of your I's and crossing all of your T's. After all, the rules are much tighter than they were a few years ago. Following those rules means understanding a variety of terms -- like fees and points.

Plus, if the housing bubble burst of 2007 showed us anything it's that things can quickly go awry when you get behind on just a couple of payments.

So, how do you know what you're REALLY getting into when you apply for a mortgage?

By crunching the numbers on a mortgage calculator!

Instead of grabbing a pencil and some paper (and risk forgetting to carry a two somewhere), you can figure out all of your mortgage obligations, down to the very last penny, by taking advantage of a mortgage calculator.

Since these calculators are all the rage these days, you'll find them all over the place. So, how do you know if you're dealing with a good one?

- Follow the KISS principle

When it comes to crunching numbers, "Keep It Simple, Stupid"! A mortgage calculator only needs to ask you for a few basic things -- like the type of loan you're considering, the amount of the loan, the down payment you're planning on making, the number of points you're considering, and the state you're going to live in.

From there, a good mortgage calculator will be able to give you a variety of loan options. You'll have your pick between certain lenders, certain rates, and certain points options. From there, you can weigh the pros and cons of each one.

And be sure your mortgage calculator keeps things simple after you've gotten the results, too. The information should be easy to read. As an added benefit, it should come with hyperlinks that can connect you to individual lenders. That way, if you see a deal you like, you can head right to the horse's mouth (or website, so to speak)!

- Specify between an original loan and a refinance

If you've got a mortgage calculator that doesn't differentiate between an original purchase loan and a refinance, you're never going to wind up with accurate information. It's like trying to compare apples and oranges!

- Look at the "last updated" date

A good mortgage calculator will tell you just how recent its results are. After all, mortgage rates can literally change from day to day. A rate that was being advertised a week ago may not be available anymore!

Bottom line -- unless your mortgage calculator has been updated in the last 24 hours, you're wasting your time.

- Make sure everything is unbiased

You should be able to get the information you need in just a couple of mouse clicks. If your mortgage calculator is asking for all kinds of personal information -- like your email address, zip code, or daytime telephone number -- you've got the wrong one.

In fact, your best bet is to look for a mortgage calculator that's not associated with any particular lender. That way, you'll be getting information from someone who doesn't "have a dog in the fight".

- Look for more advanced options

Good mortgage calculators won't hang out by themselves. Instead, they'll be paired up with more advanced search options. For example, there may be a separate calculator that lets you fill in more specific information -- like an estimation of your credit score or whether or not you've ever filed for bankruptcy. Everything is anonymous, but by being more specific, you'll get a better idea of what lenders will offer when you officially apply.

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