For those shopping for a new home, there are many variables to consider, especially those in the realm of finances. Fortunately, the digital world has expanded to include a variety of mortgage tools for Mississauga buyers.
At StartMYPlan, we help our clients get the best rates on Ontario mortgages. As a local Canadian company, we pride ourselves on working closely with our clients to ensure you not only have the best rates at your disposal but all the information and tools you need to be successful when you buy your home.
One of the tools we often recommend to our Mississauga clients is a mortgage calculator. Here we will dig a little deeper into what a mortgage calculator is, how it works and how you use it.
What is a mortgage calculator?
A mortgage calculator is a mortgage tool Mississaugans use to better budget for a new home purchase. It helps you determine a variety of factors regarding a potential mortgage before you obtain the loan. There are different mortgage calculating tools available, including:
- Payment calculators
- Loan amount calculators
- Mortgage matching calculators
- Down payment calculators
The mortgage tools Mississauga residents choose to use is often based on which step of the home buying stage you are in. For example, if you are beginning, you might use a payment calculator to tell you how much a monthly payment would be for a home costing x-amount. As you budget for your new home, you may use a calculator to tell you how large your down payment should be. Eventually, you will want to use a mortgage matching calculator or work with a mortgage broker to find the best rate for a loan.
Using the Calculator
Being an online device, much of the information you receive from a mortgage calculator is automated. The tool is designed to give you an answer based on the data you enter into the blank fields on the page. You might be asked to supply information such as:
- Mortgage principal
- Length of loan (amortization period)
- Frequency of repayment
- Interest rate
- Down payment amount
- Monthly income
- Monthly expense amount
From this information, your calculator will tell you how much you can afford to spend on a house, what your monthly payments will look like and more.
You can find an online mortgage calculator through most mortgage brokerages, banks and other lenders in Canada. They are free to use and it just takes moments to fill in your information and see results.
When to use a mortgage tool in Mississauga?
We covered this a little bit above but one of the questions we receive most frequently regarding mortgage tools in Mississauga is, “when is the best time to use a mortgage calculator?” This is relative to the borrower. You will likely find that different calculators come in handy during different stages of the home buying process.
Many home buyers choose to begin their process with an affordability calculator. This helps you determine the price of the home you could potentially afford based on income and other variables. This will help you decide how much money you want to ask a bank for, and whether you are likely to be approved for such an amount.
This is especially helpful if you have had unrealistic goals where your future home is concerned. Maybe you have been shopping for a $400,000 home when your calculator tells you that $300,000 is more affordable for you. This will keep you from searching for homes in the wrong area or price point and keep you from being disappointed later.
Does my bank use a mortgage calculator?
In a sense, yes. Your lender will use a type of mortgage calculator to see if you are a good fit for their loan. Of course, to make this call your lender will use more than an online tool. They will also pull information from your credit check and financial history to ensure you can afford the loan they offer.
The main reason a calculator isn’t enough for a lender is that it doesn’t deliver a clear picture of your spending and assets. It is important to a bank that a borrower has something on which to base their promise to repay. Therefore, borrowers with other properties, vehicles, stocks and items of value appear safer to lend to.
Making the Most of Your Calculator
While mortgage tools in Mississauga are helpful in creating a realistic view of your potential mortgage and future repayments, it only works if the information you input is accurate. As an automated tool, online calculators simply compile the information you type in with known information about the current lending climate. This means that embellishing on income, debt or other factors could prevent the calculator from providing accurate results.
If you decide to use a mortgage calculator, consider preparing your information before you begin. Look at the tool to see what it needs from you and take the time to do a little digging to find it. Once you have everything you need, you can fill in the calculator form and relax knowing that your results are as precise as possible.
Reuse Your Favorite Mortgage Calculator
Believe it or not, you may use a mortgage tool in Mississauga for more than selecting your initial mortgage. Homeowners who refinance in the future may use a mortgage calculator to determine future terms, interest rates and payment options. You should work with your mortgage broker as you go through this process as well. However, just like your first mortgage, you may find the tool useful to set realistic boundaries and budget for the future.
Contact StartMYPlan Today
Whether you are a first-time homebuyer, or simply shopping around for the best rate to remortgage, StartMYPlan can help. As a leading mortgage brokerage here in Mississauga, we work hard to ensure our friends and neighbours find success in their home financing endeavours. It is important to us that you not only find the best rate available but have all the support you need to get there.
For more information on helpful mortgage tools, contact StartMYPlan at 1-888-831-6716 or contact us here.