Benefits of Getting your Mortgage Calculated

If you are looking to purchase your first home you are probably in a position where you need to borrow at least some of the value of your new home. This loan is known by several names including a homeowner loan, a home equity loan or a mortgage. However, all these names refer to the same process – borrowing money so that you can purchase property.

When you take out a mortgage, the most important thing to be aware of is that your loan is secured against your purchase. What this means is that if you fail to keep up the repayments agreed as part of the mortgage contract, your lender could decide to repossess your property, leaving you homeless. While most lenders will do everything possible to help you get back on your feet, if there is no suitable financial solution, repossession or foreclosure as it is also known, is a very real possibility.

You will also be expected to pay interest on your mortgage. The exact amount of interest will depend on your mortgage deal and is largely determined by your credit score, which shows how much of a risk a lender is taking by loaning you money. The way that this interest is calculated can confuse people when it comes to working out how much their mortgage repayments are likely to be. Getting your mortgage calculated can remove many of the question marks from the repayment process.
 

What does it mean to get your mortgage calculated?

When you get your mortgage calculated, you will be able to see exactly how much money you will be repaying each month. The figure you will be given will include the capital repayment as well as the relevant amount of interest. This repayment figure will remain fixed provided you are on a fixed rate mortgage. If you have chosen a flexible rate mortgage, the interest amount may change, but usually by only a few dollars at most. Your mortgage advisor will be able to give you more specific advice regarding flexible rate mortgage products.
 

Benefits of getting your mortgage calculated

Getting your mortgage calculated is vital when it comes to deciding which property to buy. Although you could potentially be eligible for a much larger mortgage, you may find that the repayments on such a sum would be completely unmanageable by the time you have factored in other day to day expenses of home ownership. This could include local taxes, HOA charges, utility bills and maintenance, as well as your usual living expenses such as food, gas and other bills. Decide what your maximum monthly repayments would be, being careful to keep some of your budget back for emergency expenses. You can then use this to determine how much you can borrow and which houses will be in your budget.

Getting your mortgage calculated is also essential for you to keep your home. If you do choose to take advantage of the maximum amount of mortgage available to you without considering what your repayments would be, you could very quickly find yourself in arrears, putting your home at risk of foreclosure. Early on in the mortgage process, this could see you owing more than your home is actually worth and if your property is repossessed, not only could you be made homeless, but you may find that you still owe your lender a sum of money.

If you would like more information about the benefits of getting your mortgage calculated, please don’t hesitate to contact our office and get in touch with our friendly and experienced real estate team.