Home Loan Calculator - how much can I borrow
How To Calculate The Best Rates For A Home Loan
Nobody likes having a high interest rate on their home loan and luckily for everyone who is hoping to apply, there are things that you can do to get a better rate. Many potential borrowers want to know how to find the best rates for a home loan - so if you're one of them, read on to learn what you could do.
What can affect your home loan rates?
There are quite a few things that can affect your home loan rates, from your credit score to the type of home loan you choose. Some of the things that you can do to get a better home loan rate include:
· improving your credit score (if you can)
· finding the best lender
· putting down a high deposit (20% is recommended)
Deciding how much to borrow depends on many factors such as:
Improving your credit score
Your credit score will show a lender how trustworthy you are. It tells them how reliable you are and how good you are with your finances - and the better your credit score, the better your chances of getting a good interest rate are.
By polishing your credit score (which can sometimes take a while), you could get yourself a much better rate on your home loan.
Finding the best lender
A good lender can get you a better interest rate, so make sure that you don't just settle for the first lender you see. Talk to a host of lenders and see which one can give you the best rate. It can take some time to find a lender that will offer you the low rates that you want, but it can be worth it in the long run.
Doing research on the different types of home loans
There are a lot of home loans out there and some can offer you a lower (or a higher) interest rate than others especially if you are a first time borrower. It may be worth it to bear in mind that some home loans, known as ARMs (which stands for adjustable-rate mortgages), have an initial low rate that then increases after a set period of time.
Some people take advantage of this and sell the property before the rate increases, but there are loads of different types of home loans that could be better for you and what you want.
The more you put down for the deposit, the lower the interest rate - so make sure you save up as much as you can before you apply.
The Final Calculation On How Much To Borrow
Once you have determined what kind of loan you require and which lender best suits your needs you need to determine two things:
- How much can I borrow based on the valuation of the property I wish to purchase and my servicing capacity
- What is the best rate I can get
These last two criteria will greatly determine which loan you should apply for.
- How much deposit do I need to buy a house – as an owner/occupier?
- How much deposit do I need to buy a house – as an investor?
- What is my loan to value (LVR) ratio?
- What is my borrowing power?
- How much should I borrow?
- How long does my loan approval last?
- How can I increase my borrowing power?
- Which lender should I use?
- Does the amount I can borrow differ by lender?
- Will I need Lenders Mortgage Insurance (LMI)?
- How much is stamp duty?
- How much can I borrow from home equity?
Calculate How Much You Can Borrow Using A Mortgage Broker
Many people benefit from using a mortgage broker when going through the mortgage application process, and not knowing how you could be helped by a broker could cost you time and money.
With a broker on your side you'll have to put in less work, too in terms of calculating how much you can borrow, and therefore the type of property you can afford to purchase! If you want to know how you can benefit from using a mortgage broker, then this article has everything you you need.
What do brokers do?
Your mortgage broker can help to find you great deals, too. If a mortgage is good but too expensive, they may be able to get the price lower. If not, then they'll keep on searching the market until they find an affordable loan that fits your needs.
With their knowledge of home loan deals they know what is and isn't fair; and this is what can benefit you the most. If a loan is unfairly priced, get a better deal from the banks than you would be able to do yourself – passing the savings on to you.
Can they help me out in other ways?
If the fact that they can find you a great loan for the best terms and conditions wasn't enough for you, then wait for a second, as they can do even more!
The mortgage process is often long and complex and can often be stressful. Luckily, mortgage brokers can also do the leg work for you, too. You can sit back and relax whilst your mortgage broker gets through the paperwork and legalities on your behalf. Often, their experience of the mortgage process may allow them to go through it faster than you would be able to alone, which is a big bonus, too.
And that's not all! Seriously, if you thought that there couldn't be anything else that a mortgage broker could do for you, then you’re wrong. They can also offer valuable advice throughout the mortgage, which is often one of the biggest benefits that they can offer.