Mortgage calculator

Mortgage calculators are used to help a current or potential real estate owner determine how much they can afford to borrow to purchase a piece of real estate. Mortgage calculators can also be used to compare the costs or real interest rates between several different loans, determine the impact on the length of the mortgage loan of making added principal payments or bi-weekly instead of monthly payments. A mortgage calculator is an automated tool that enables the user to quickly determine the financial implications of changes in one or more variables in a mortgage financing arrangement. The major variables include loan principal balance, periodic interest rate compound interest, number of payments per year, total number of payments and the regular payment amount.

To estimate your chances of getting a loan you need to look at two ratios, payment to gross income, and debt service to gross income.

Determine the payment to gross income ratio by dividing the payment amount by your total gross income, then multiplying the result by 100. This will give you the percent of gross income that will be used to make the payment. Rule of thumb; less than 20%, you are in great shape, 20% to 30% still good, over 30%, may have problems getting a loan.

Next, you need to check the total debt service to gross income ratio. To get it, add up all monthly payments to credit cards, bank loans, auto loans, etc. If selling a current home to buy a new one, substitute the new home payment amount for your current one. Divide this total by your total gross income and multiply the result by 100. Rule of thumb; less than 40%, you are in good shape, 40% to 45% you will probably have to work to find a good loan, over 45% probably want to look at low document or no document loans. These usually much have higher interest rates and upfront costs.

When purchasing a new home most buyers choose to finance a portion of the purchase price via the use of mortgage. Prior to the wide availability of mortgage calculators, those wishing to understand the financial implications of changes to the five main variables in a mortgage transaction were forced to use compound interest rate tables. These tables generally required a working understanding of compound interest mathematics for proper use. In contrast, mortgage calculators make answers to questions regarding the impact of changes in mortgage variables available to everyone.

You can use an online mortgage calculator to see how much property you can afford. A lender will compare your total monthly income and your total monthly debt load. A mortgage calculator can help you add up all your income sources and compare this to all your monthly debt payments. It can also factor in a potential mortgage payment and other associated housing costs (property taxes, homeownership dues, etc.). You can test different loan sizes and interest rates. Generally speaking, lenders do not like to see all of your debt payments (including your property expense) exceed around 40% of your total monthly pretax income. Some mortgage lenders are known to allow as high as 55%.

Salary Calculator

One of the most important considerations of a move is the cost of living in your destination city - is it cheaper, more expensive or comparable? There are various salary comparison calculator tools that simplify the process by calculating what salary you need in your new city to match a change in cost of living. There are international salary calculators available if you are moving outside the U.S.