Ah, the loan calculator: A consumer’s best friend, at least if that consumer is looking to buy or refinance a home. Easy to use and faithful to the end, a loan calculator is all about YOU and your unique needs. OK, OK, so getting that excited by a mortgage calculator may seem like an excursion deep into Nerdville, but listen up: Loan calculators really are incredibly useful and they can help you “try on” different loan situations so you can get a real idea of what your best options are likely to be, based on your budget and income.
One thing these loan calculators all have in common… They really are easy to use, too: You only need minimal data to use these calculators – typically the amount you want to borrow, the loan term and the interest rate; if you have an idea of how much property taxes you’d likely pay or a rough idea of home insurance costs, so much the better. Punch in the data and the calculator will reward you with your monthly projected costs and can even provide you with a complete amortization schedule – that’s mortgage-speak for a chart that shows you what your mortgage balance would be as you make payments over the life of your loan or, in the case of an ARM, until the initial adjustment occurs.
And because it’s a calculator, you can take your time to run different scenarios as you get more information or as new ideas occur to you – even in the middle of the night, which seems to be when most financial pondering occurs. You can do all of this on your own time and at your own pace: Unlike a human, a calculator isn’t going to tap its foot, gaze meaningfully at a clock or begin shuffling papers to make you move faster. It’s a no-pressure way to gain a clearer understanding of what’s going to work best for you, in terms of the rate, the term and even the amount of house you can actually afford.
Of course, calculators can only tell you so much; while they’re great for giving you a rough idea of specific scenarios, they’re certainly no substitute for a real, live person (sorry, Siri®!). To get a more accurate picture of all your options, you need to speak with an experienced mortgage professional who can perform a more detailed review of your circumstances and make sure you get the best deal possible.