Published on December 23rd, 2013 | by Pete0
Know What Your Payments Will Be, Before Your Shop For A Mortgage: How to Work it Out
Do you know how much your mortgage repayment is going to be each month? The good news is that it is easy to find out how much your payment will be before you start shopping for a mortgage. What do you need to know before you can figure out your monthly repayment?
How Much Do You Plan On Borrowing?
The first figure that you need to know is how much you plan on borrowing. This amount will then be divided by the number of years that you plan to pay for the mortgage. The amount will determine how much you will pay each month in principal.
What Is The Interest Rate On The Loan?
The interest rate is going to add to the amount of your payment. Your interest rate could be as low as 4 percent or as high as 8 percent or more based on your credit history and income. You can ask a local mortgage broker for an estimated interest rate based on your credit.
Don’t Forget About Taxes Owed When You Buy The Property
There are stamp duties and other taxes due when you close on a mortgage. These costs need to be considered when you shop for a mortgage and can easily be calculated using online tax tools. In some cases, you may be able to roll these costs into your loan. U.K. Citizens will pay more than those who are not residents or domiciled in the U.K.
Where Can You Figure Out How Much You Will Pay?
There are a variety of mortgage calculators online that you can use to figure out how much you pay for your next home. You can insert different interest rates, different home values and different tax rates to see how it impacts your payment. A mortgage repayment calculator may also be able to tell you how much you can borrow based on your income. It is important to keep in mind that these calculators are estimates only. It will be up to your lender to determine your monthly payment based on their own guidelines.
If you are looking for a mortgage, you are going to need to know how much that mortgage will cost you. Knowing how much you are going to pay helps you shop around for a lender that can give you a loan that fits your budget. Whether you are buying your first home or have gotten mortgages in the past, it is always important to have a good idea of what you will spend before you shop for mortgages.