Mortgage Financial Calculators Loan Amount: $ Annual Interest Rate: % Loan period: years Monthly Payment Information Monthly Payment: $ Total Save Over Term: $ function computeMortgage() { // Read in the loan values var loanAmt = document.getElementsByName('loanAmount')[0].value; var annualIntRate = document.getElementsByName('interestRate')[0].value; var loanPeriod = document.getElementsByName('loanPeriod')[0].value; // Calculate the Monthly Payment var monthlyIntRate = annualIntRate / 100 / 12; var numPayments = loanPeriod * 12; var monthlyPayment = (loanAmt * monthlyIntRate) / (1 - (Math.pow(1/(1 + monthlyIntRate), numPayments))); // Calculate the total save over term var totalSave = (monthlyPayment * numPayments) - loanAmt; // Display the values document.getElementsByName('monthlyPayment')[0].value = monthlyPayment.toFixed(2); document.getElementsByName('totalSave')[0].value = totalSave.toFixed(2); } window.onload = function() { computeMortgage(); }; Understanding Mortgage Financial Calculators With the cost of buying/owning a home continually rising, it’s important to research your options thoroughly and make informed decisions before committing to a mortgage loan. Mortgage calculators are controllers designed to help consumers gauge their borrowing power and regular payments. They usually provide information related to monthly payments, interest rates, loan terms, amortization, and more. For potential homeowners, understanding the features and benefits of these calculators is the key point to not only getting the best mortgage but also staying financially solvent over the life of the loan. One of the major benefits of mortgage calculators is having the ability to crunch the numbers and gauge precisely how a loan will impact a person’s current income and future budget. This can also help to identify any potential refinancing opportunities that may be present. Before taking out a loan, mortgage calculators can also help borrowers assess the costs associated with various loan types. They can provide an accurate picture of the total cost over the entire loan term and identify any potential money-saving areas, such as fixed-rate and adjustable-rate interest rates, closing costs, and whether it’s better to purchase of build a home. Utilizing Mortgage Financial Calculators To use a mortgage financial calculator, the user must first input specific information, such as the loan amount, interest rate, and loan terms. After that, the calculator will generate an estimate of the monthly payments and total cost of the loan. It can also provide information on fees, such as origination points, closing costs, and prepayment penalties. The output generated by the calculator will serve as a tax deductible document come tax time. Plus, it will serve as the user’s agreement with the lender. From this information, one can accurately predict how much money he or she will pay over the life of the loan. Therefore, it’s necessary for borrowers to research different loan calculators, compare their results, and ultimately make an informed decision. Tax Futures with Mortgage Financial Calculators The main benefit to mortgage financial calculators is that it can give insight into the actual money-saving tax futures associated with the loan. For instance, when borrowing money over the short-term, it’s possible to set different limits on the interest rate and still meet particular loan terms and conditions. This can be done through tax deductions or investing the purchased property through a tax-free wrapper account. Mortgage calculators can also help borrowers figure out the tax advantages related to the specific loan they’re considering. Certain types of loans, such as interest-only loans and varying combinations of adjustable-rate and fixed-rate mortgages, can each provide different levels of deductions to homeowners. Mortgage financial calculators can identify what these deductions are, and thereby enable borrowers to assess the extent of money they’ll be saving. Understanding the Risks of Mortgage Financial Calculators Mortgage financial calculators, while immensely helpful in assessing different borrowing options and identifying potential money-saving tax futures, can also present certain risks. One major difficulty of mortgage calculators is that they don’t assess all the costs associated with a loan. For example, they may not cover loan origination fees, mortgage discount points and prepayment penalties. Plus, users may not factor in other expenses, such as moving costs or association fees. Therefore, it’s important to do additional research when using mortgage calculators to ensure that all potential of costs that could be incurred are taken into consideration and factored into the long-term loan decisions. Also, most mortgage calculators are not set up to incorporate variable expenses such as childcare, fuel, and utility costs. Therefore, it’s important to ensure the calculator you’re using will pick up these costs in order to get a more accurate budgeting picture over the life of the loan. Many calculators are also unable to take into account any positive changes in your life over the life of the loan, such as potential salary increases or job opportunities. Making the Right Choice with Mortgage Financial Calculators One of the best ways to make sure you’re making the right decision when it comes to evaluating mortgage loans is to utilize a mortgage financial calculator. These tools can help you identify the actual long term costs, determine your borrowing power, and even identify potential tax savings related to the loan you’re considering. However, it’s important to research what types of calculators are available to you, understand the risks associated with them, and factor in all the possible expenses when using the calculator. In the end, by being an informed consumer, you’ll be better able to make the smart decision during the borrowing process.