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By Jakob Jelling
“You’ve been approved!” The words you have always wanted to hear when you
filled out the home loan application. It swirls through your mind the
opportunities and memories you will cherish in your new home. Before you even
start shopping for a home it is best to understand in real terms what you can
afford. Your income level may make it tight for you every month to make the
mortgage payment if you purchase too much home.
You may wish to know how much the home may cost you before you sign your
contract. So you will need to be a financial calculator to figure out the
monthly paper in real-terms. There is an easier way. The Internet has become
the best place for mathematical equations and there are some great websites
that will do the figures for you should you know the absolute basics of the
transaction. Here are some of the factors that can help you determine what
your monthly interest rate will be: Amount of home Percentage of
interest Duration of loan (5, 15 or 30 years) Down payment Insurance
(percentage of loan) Start date of the loan
Sites like bankrate.com (http://bankrate.com) and countrywide.com (http://
countrywide.com) provide free online calculators. Save yourself time and
frustration trying to determine the monthly payment when these programs
offered free work well. Some of the calculators can also factor in extra
payments to your schedule and will show the end result savings. An
amortization schedule is also provided to show you how your payments over the
thirty years reduce your liability and increase your equity in the property.
Most mortgage lenders will give you a maximum you can afford and should be
within a few dollars of the actual dollar amount should you ask them for the
monthly payment calculated. Your being comfortable with the mortgage payment
will help you recognize your monthly commitment to the property. There is a
lot more involved than just making the payment to the mortgage, utilities,
upgrades and other expenses come into play when factoring in all your overall
commitment.
By Jakob Jelling
http://www.cashbazar.com (http://www.cashbazar.com)
Jakob Jelling is the founder of http://www.cashbazar.com (http://www.cashbazar.
com). Visit his website for the latest on personal finance, debt elimination,
budgeting, credit cards and real estate.
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