Home loan calculators are an essential tool for guiding you through the process of acquiring a loan for your dream home.
They are easy to use and in most cases available for free use on the Internet. Before you use any of these, let’s look into the situations when you should seek a loan for your home and then benefits these online calculators for computing requirements and quick decision making.
When should I seek a loan:
Loans for home are no child’s play! You must think and decide carefully whether you really need the loan. Look into your current savings, investments and your current or ancestral property before you decide to go for a financial borrowing for your home.
Most good banks, home loan finance companies, money lenders and agents would guide you if and when you need a loan.
A few situations when you can go for monetary borrowings for your home are outlined below:
- When you need to buy a new house for your family
- When you need to carry our repairs like painting or waterproofing
- When you need to do complete renovation such as tiling or changing the ceiling or room structure
- When you want to purchase an additional property as an investment
- When you want to develop or buy a piece of land that you intend to build on later on
In each case, finance options available to you will vary as per your financer.
You are expected to provide complete details about the reason you want to avail the loan. Based on these details, the bank will decide how much you can borrow.
But before you actually seek a loan, banks provide a simple guide in the form of specialized calculators which help you understand and compute how much you can borrow. If you are looking, Good financial calculator Then check it out
How much can I borrow:
This is where these home loan calculators come into play! It is some code or program that does all the complex mathematics for you. It can show you how much loan you can borrow.
All you need to do is, enter details about your monthly or annual income. To get a more accurate idea of your borrowing capacity, make sure you mention all sources of income in a combined manner.
This means, if you have income sources other than your salaries, such as income from your home business or farm or earnings from various investments, club them together to arrive at a total annual income figure.
Next, you need to decide on how many years you can pay back the loan. Look for the key facts sheet or ready charts which show you how much interest rate the bank or financier charges. Enter these details in the calculator to arrive at the final figure which you can borrow.
What you need to do the calculations:
You need to give information such as
- The purpose of the loan, such as self-occupied or investment
- Loan term or tenure, in years or months
- Interest rate as variable, standard rate, etc
- Advanced repayment option which helps reduce the tenure but against a charge
Other home loan calculators will take into consideration stamp duty, service charge, taxes such as property tax, credit profile or rating, start date and end date, etc.
Advanced home loan calculator:
Getting a loan requires consideration of many factors. This will entail specifics such as a mortgage, amortization, your current property value, etc. Advanced home calculators will look into details such as whether you have any previous loans and how much are you paying off each month.
Some advanced home These calculators have the following features:
- Gross salary and wages
- Rental Income and Investment Income
- Tax-free income and bonus income
- Area, state or region wise property borrowing
- Ongoing expenses such as previous loans, credit union loans,
- Overdrafts or ongoing loan,
For first-time applicants, simple versions are also available in the market which provides step by step guide for complete calculations.
What extras can I find:
These calculators are good for doing mundane calculations, but these may not give you a very clear picture of how those extra expenses would affect your pockets.
You must take into account a huge number of other minor and major expenses whilst buying a home. These expenses include:
- Reverse mortgage expenses
- Stamp duty expenses
- Processing fees, legal expenses
- Transaction fees, deeds and split loan expenses
- Home insurance fees
- Registration charges
Talk to your property agents, your lawyers, and the constructors to understand these specific expenses. Never ignore these expenses as they might suddenly throw off your budgets off balance.
Look for budget planners or budget calculators on the net which can help you estimate these expenses and be prepared for the future.
Where do I find a good calculator:
Free calculators and other computing applications are available on the internet.
They also come as nifty applications for your Desktop PC or your mobile phone.
Your best bet to find a good home loan calculator is your financier or your local bank’s website.
You can also find various loan comparison tools that help you compare the results from various sources and take a wise and informed decision.
Home loan calculators must be used as a rough guide. They can save you some fees of agents but it’s always better to search and compare the best options available.