Everyday you see a pop up window that says mortgage calculators and you get begged looking at them. Have you ever wondered what these mortgage calculators are for Let us see what are these calculators used for and hoe can it be of help to you.

Wee coming to the basic definition of a mortgage calculators. A mortgage calculator is a simple device that is used to calculate your tentative payment for each month for a loan that you would have taken to buy real estate. You can also use it to compare the interest rates of different loans as to how much will they cost. This can help you to decide on the right mortgage loan that you would need to buy a real estate.

The basic thing that the mortgage calculator would need to give you the details is the amount of loan that you need to borrow. You would also need to provide the interest that you are expecting to pay back your loan. Now if you are confused and cannot determine how much do you want to borrow in such cases you can easily calculate the amount. Just keep in mind that you will need to subtract the down payment from the cost of the house. But if the down payment is too small then you can forgo that and enter the full amount of the house.

After you have finished entering all the details then you can calculate your monthly payment. Remember that the mortgage calculator gives you only the tentative price and not the actual cost. You can obtain the true cost and the interest from your lender. You can also use this mortgage calculator for calculating your payments for debt consolidation mortgage loans and do a comparative study of your loan payment with your monthly savings. You can use this calculator to decide for the right loan for your investment and can also determine how much will be your monthly expenditure. If you would know your pay back plan then it will be easier for you to select the right offer as well as it can help you plan how to reduce your debt. Every one of us at some time in our life buy a house or those who have bought a house plan to refinance it. Below is a list of some of the important calculators that you may use sometime or the other.

Monthly Payment – generally people who own a house pay a monthly mortgage payment. With the help of this calculator the monthly payments can be calculated. The lenders have various offers regarding the interest rate and it is up to the buyer to select the offer so the buyer can easily calculate with the help of the calculator how much will their monthly payment be according to the offer.

Bi-weekly Payment –this is used to calculate the fortnightly payment.

There are many people who pay off their loans every fortnight and in this way most of their money goes to pay off the main balance.

Additional or Extra Payment – at times the lender gives an offer to the client to pay off the money on the principal amount by paying an extra amount once or twice every year. With the help of this calculator you can calculate the amount that you need to pay to the lender. It is usually 20% that the client is allowed to pay.

Interest Only Payment – there is a set time within which the owner is allowed to pay back his mortgage. If the owner gets hold of the right property then he builds his security in a very less time. By this the homeowners can pay back the interest early and this proves to be very beneficial to the owner.

Affordability – under this the calculator can calculate how much can a homeowner borrow. There are some necessary things by which make the homeowner can be eligible for a loan the first is that the value of the property should not exceed the loan value, second is that the total income does not go beyond the mortgage payment.

Income Requirement – this is a very important factor. How much you earn determines whether you can pay back the loan or not. By calculating the principal amount, the interest, the duration of pay back, the property tax the homeowner can determine the amount that has to be earned to pay back the loan.Tax

Deduction – the interest on the mortgage and the discount points have a big relief on the tax returns of the homeowners. The government allows the homeowners to subtract their interest and the discount points while filing tax.

Annual Percentage Rate – it is a very wide misconception and the most common blunder that people do. They look at the interest rate and if it is low enough they don’t bother to look at the APR. The APR determines how much are you going to pay back the lender annually and it is to be officially declared by the lender.

Refinance – at times the mortgage lender allows the homeowner to change the interest rates, but this is not the case every time. This is the reason why most of the people who are thinking of buying a house look out for better rates of interest.

It is very important that you calculate your own interest and principal amount before you approach a lender for getting a loan. It can be beneficial for you as you can decide which offer to go with. The mortgage calculators are very beneficial and help the prospective homebuyers to decide on how much would they need to buy their dream house.