Using a Mortgage Calculator

There is an old and well known saying that an Englishman’s home is his castle. But while the origins of this expression are routed in the distant past, the dream of home ownership is as strong today as it always was. So, how exactly does one go about fulfilling this dream? And how does it get paid for? The first step, of course, is to start looking for a home to buy. Be it a new house, a period property or a simple apartment, the place to begin is at the local estate agents. Contrary to popular belief, very few estate agents are in the business of misleading or misinforming their clients. Agreed, we’ve all heard horror stories about those who purchased nightmarish properties in equally nightmarish neighbourhoods, but on the whole estate agents adopt a commendably professional approach that is designed to help rather than hinder. As well as providing valuable house hunting tips, many estate agents employ educated and well informed financial advisors who can offer advice on a range of mortgage-related issues.

This point is important since all too often house hunters start their search without a clear idea as to how their dream is to be financed. In addition, since most potential buyers are unclear as to how much their monthly repayments are likely to be, many advisors use something called a mortgage calculator to work out the costs. Actually, there are two different types of mortgage calculator, both of which warrant a quick word or two. The first type is sometimes known as a mortgage affordability calculator because it is designed to assess the amount of money that buyers can borrow. The calculations involved are fairly straightforward and work on the principle of multiples. For example, most lenders will allow buyers to borrow two times their joint income or three and a half times a single income. There are exceptions of course, but the above figures function well as a benchmark. The second type of mortgage calculator enables borrowers to see exactly how much they will need to repay every month.

The calculations involved are often quite complex since many different types of mortgage exist and most offer something known as variable interest rates. Put very simply, as interest rate fluctuate, so will your monthly repayments. Once you have established how much you can borrow, and how much it will cost to repay, it is time to get down to the business of looking for your dream home. And this is where the real fun begins. Try to allocate at least thirty minutes per visit, and be sure to take a thorough look around the entire house or apartment. Most estate agents will arm you with a comprehensive check list of things to look out for, so don’t worry too much if at first you don’t know how to judge all the different properties you will be visiting. Most importantly of all, remember to relax and enjoy yourself!