When looking to buy a new home, it is critical to know how much you can afford. This is important because the price of the home you decide to buy will dictate the size of your monthly mortgage payments, and consequently, your ability to pay for the necessities while keeping up with the payments.
Knowing how much you can afford requires a thorough evaluation of a number of factors, including price of the home you want to buy, your income, and your expenses. Also, since mortgage payments do not simply comprise of the borrowed amount, but various taxes, insurance premiums, and other charges as well, it may become difficult for anyone who’s searching for Burnaby homes for sale and is ready to make a real estate transaction. Therefore, at Real Estate Burnaby, we offer you an online mortgage calculator that will make the process simpler, easier, and quicker for you.
What is a Mortgage Calculator?
A mortgage calculator is one of the most commonly used tools by prospective homebuyers looking for Burnaby homes for sale. The mortgage calculator offered by Real Estate Burnaby is designed in such a manner that it takes various factors that are likely to affect your purchasing power. Keeping these factors under consideration, the mortgage calculator provides you with the following estimates:
- Amount of monthly payments you will make to the lender over the repayment period
- The number of payments you will make over the repayment period
- Total interest that you will pay over the repayment period
The values that you need to enter into the calculator in order to generate the results include the following:
- Purchase amount or the value of the property you want to buy
- Interest rate
- Down payment you are able and willing to make
- Payment interval. There are four different payment intervals available, including weekly, bi-weekly, monthly, and bi-monthly.
- Mortgage term in years
- Closing cost either in percentage or in dollars
Why Use a Mortgage Calculator?
Home buyers are often unsure about why should they use mortgage calculator. This is mainly because they are not aware of the benefits that they can avail by using an online free mortgage calculator. Using a mortgage calculator not only helps them determine the monthly payment they can afford, but also allows them to compare the rates offered by different lenders and choose the one that’s suitable to their budget and preferences.
So, if you’re contemplating over whether you should try our online mortgage calculator, here are a few reasons why you should give it a try.
Being an automated tool, mortgage calculators provide you with accurate estimates of what you can afford. All you need to do to get an accurate result is enter the values required carefully.
Using a mortgage calculator allows you to eliminate the hassle associated with contacting several mortgage lenders to know their interest rates and calculate the monthly payments accordingly. And once you have done the calculations, you are free to choose the one that offers you the best deal.
Comparing the terms at which different mortgage lenders are willing to offer you a loan will help you find a good mortgage that’s the right fit for your budget and your housing needs. With our mortgage calculator, you can compare different rates and select the right one.
Using Our Free Mortgage Calculator
As already mentioned, you will be required to enter certain information in order to get an accurate estimate of your monthly mortgage payment. While interest rate, price of the property you want to buy, mortgage term, and payment interval will depend on the property you decide on and the mortgage lender you select, down payment and closing costs are the two variables that you must understand.
Closing costs vary from transaction to transaction and your real estate agent should be better able to help you with it. On the hand other, down payment will depend on the mortgage eligibility requirements and the property you select from Burnaby homes for sale.
Generally speaking, most mortgage lenders require borrowers to make a 20% down payment. This means that if you’re applying for a loan amounting to $300,000, you must make a down payment of $60,000. While there are mortgage lenders that offer mortgage loans on smaller down payments as well, it may end up costing you more in the long-run. A 20% down payment, on the other hand, offers you the following benefits:
Lower upfront fees
Lower ongoing fees
Smaller monthly payments
More equity in your home from the very beginning
Apart from down payment, the loan repayment term and interest rate also affect the amount you repay to the lender. Always prefer a loan that offers you a shorter loan repayment term as this will reduce the amount you end up paying as interest. However, when selecting a loan with a shorter repayment period, always make sure that you can afford the larger monthly payments.
We Would Love to Help You Out!
If you’re out in the market looking for Burnaby homes for sale, we can help you. At every stage of your real estate journey, from selecting the best home for your family to securing a mortgage loan and closing the deal, our experts will be there by your side helping you with every issue that you may face in your real estate journey.
If you’re ready to realise your housing dream but unsure about where to start, get in touch with us and we will guide you through the process. Or if you have already found your dream home, use our online mortgage calculator to know how much you can afford. You can also contact us at (604) 526-2888 to know more about the real estate services we offer to home buyers and sellers.