Morgage Rate Calculator Helps You Check Affordability

2007-03-08 10:33:40

( Technology )



When you are taking out a mortgage, one key factor that you must weigh before making a final decision is whether the resulting monthly morgage payment will be affordable.

This is crucial because you are considering your monthly income and the necessary expenses you will have to spend for your family’s upkeep and other needs. The monthly morgage payment will become an additional necessary expense. You will need to have a morgage rate calculator handy.

The morgage rate calculator results will later feed into your morgage payment calculator. After you have discussed the details of the proposed housing mortgage, your mortgage lender will give you a morgage interest rate quote, usually stated in terms of annual percentage rate (APR).

If you wish to know what that means in terms of monthly interest payments, you can use your morgage rate calculator for the purpose. There may be a further refinement in terms of actual interest cost to you, because the morgage rate calculator may make an adjustment for the after-tax consequence of morgage interest rate. If you recall, mortgage interest payments are tax-deductible.

After the calculator has given you the corresponding monthly interest factor (usually in terms of several digits coming after a decimal point), you can multiply that factor into the gross amount of your mortgage and the resulting number will correspond to your monthly interest payment – the financial consequence of the morgage interest rate you contract.

It will then be easy for you to determine your monthly morgage payment. The amount you pay per month is essentially a composite of your monthly interest payment and your monthly principal payment.

With the multitude of mortgage packages available on the market, you should be able to find one that is affordable, given your monthly income and necessary expenses. The calculator will help you determine which one will suit you best.


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