Buying a roof over your head can be very difficult, especially if you haven't planned it right. Things seem hunky dory until unforeseen circumstances cause you to skip a mortgage plan; and from thereon it's a downward spiral. But a home loan calculator can help you plan your investment well.
A home loan calculator is an online tool that tells you the anticipated mortgage payment that you would be paying for different home loan amounts, interest rate and the term of loan. While some are very basic and offer just the monthly mortgage payment, there are others that allow you to factor in extra income.
Variations to the simple loan calculator include the home loan comparison calculator (allows you to compare home loans), split loan calculator (calculates repayment and long-term interest rates under different scenarios), lump sum repayment calculator (allows to determine if you would be profiting from a lump sum repayment), and even a refinance calculator (allows you to determine if refinancing is a better option).
You can use the calculator either ways; to calculate the amount you can borrow, by specifying the monthly income you can afford or to calculate the monthly EMI that you would have to pay for the loan amount that you are going to borrow.
If you've ever taken a loan for your home, I'm sure you'd agree with me, that there's nothing more complicated than choosing a home loan. Add to this the arithmetic jugglery that financing consultants' subject you to; the entire process reaches dizzying proportions.
It's not always about the loan amount; there are other fees, interest rates, etc. involved. It becomes all the more complicated when you have to choose between fixed rates and adjustable rates or have to compare loans with different terms of payment. Needless to say, the repayment for the same loan amount would be different for 10, 15, and 30 years old loan period.
A loan calculator can help you find the best terms within a short span of time. Of course, you can make all these calculations manually, but the process is complicated and there are chances of a mistake that can prove fatal to your investment.
There are plenty of websites that allow prospective buyers to decide on the right home finance option. Before you choose the right loan amount and the rate of interest that you can afford, make sure that you have tried different amounts before you have chosen the right home loan.
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