Mortgage Affordability Calculator
- How much can you put on your down payment
- The income of your household
- The total amount that you already owe ex: car loans, student loans, credit cards, etc.
This process is super simple, you just have to add the value of your assets, your income, what you owe, and what you are repaying in the mortgage affordability calculator. Once we have all this information, it will be easier for us to paint the portrait of the situation. With all this information, we will be able to give you an approximation of what rate and monthly payments you would be looking at to buy your new home.
Your Down Payment
The amount you choose to use as your down payment is important and you should ask help to determine it from an expert or our mortgage affordability calculator.
The reason why it is so important is that a bigger down payment can reduce your interest rate and let you avoid multiple costs in loan insurance. On the other hand, a smaller down payment can lead to higher interest rates, and mortgage insurance can become costly. You should of course choose the amount based on your financial situation and your goals.
How Much Do You Need For Your Down Payment?
As a potential buyer, you need to save at least 5% of the total amount of your mortgage to use it as a down payment for any residential property that is worth less than $500K. If you have less than 20% available for your down payment, we will also calculate your insurance premium with our mortgage affordability calculator.
If you want to buy a house that is worth between $500K and 1 million dollars, you will need the same 5% down for the first $500K and then you will need to save 10% of the remaining amount.
If you are looking to buy a house that is worth more than 1 million dollars, you will need to save 20% for your down payment.
If you are not sure what amount to save for the down payment, you can use our mortgage affordability calculator. It will let you know how much you will need to pay monthly and how much to save for the down payment.
3 Things To Check With The Mortgage Affordability Calculator
There are a lot of solutions out there if you want to increase your mortgage affordability and lower the actual cost of your mortgage. Of course, planning ahead and using our mortgage affordability calculator is a great first step but here is how you can get those monthly and yearly payments down.
- Credit Score: If you have what is considered a low credit score, you should try to increase it in order to get a more affordable mortgage. Having a better credit score will also get you a better rate and better terms in general. The reason is simple, the lender wants to be sure that you can pay back the loan.
- Mortgage Amortization: Another great way to save money, in the long run, is to increase your mortgage amortization. When using the mortgage affordability calculator, try changing your amortization period to see the results. Before making a decision, make sure that you share your result from the mortgage affordability calculator with your mortgage broker.
- Down Payment: Having a bigger down payment can make a huge difference when it comes to what you will have to pay over the years. If you can put 20% or more down, you will save on the insurance and maybe be able to get a better rate. You can change the down payment amount on the mortgage affordability calculator to see what difference it makes.
There are more ways to reduce your payments and to increase your mortgage affordability but these are 3 of the most important ones. To see how these things affect your rate and total payment, don’t hesitate to use the mortgage affordability calculator.
Why Use The Mortgage Affordability Calculator?
Our mortgage affordability calculator lets you plan ahead and allows you to see what your mortgage payments will look like based on multiple factors. It is a great tool to see what kind of house you can afford in your financial situation. It helps with the creation of a long-term budget and for your long-term financial plans.
Once you have tried the mortgage affordability calculator and you know what kind of down payment, amortization and rate you are looking for, you should give Asim Ali a call.
You have shopped around, you have used the mortgage affordability calculator, you have asked your friends and family, now is the time to act! Give us a call and we will work with you in order to find the best mortgage products and rate that fits your wants and needs. At Asim Ali Mortgage Brokers, we work with you in order to make sure that you and your family will have the best deal available.