More than just the mortgage calculator

For those who have been around financial calculators, the Hewlett-Packard 12C has been the classic tool of choice for bankers. The evolution of financial services on the web has brought people great opportunities to take loan payment calculations and debt management scenarios into their own hands. Consumers can get an advantageous head start previewing what loan payment might work for their budget. If we go beyond the results that pop up from an online loan payment calculator, here are important tips to consider.

1. What type of property are you purchasing? Other monthly housing payments than just the loan payment include taxes, homeowner’s insurance, mortgage insurance, homeowner’s association dues, and maintenance dues. These variables are based on the home being a single family residence or a condominium.

2. How much down payment can you put towards the purchase? Buyers make assumptions about how much money they need for down payment. A loan consultant will evaluate the buyer’s assets and give recommendations about how much to use for down payment and how much to keep for closing costs and reserves.

3. What will the closing costs be? With a buyer’s focus usually on down payment, buyers are unclear about the costs associated with obtaining a mortgage. A loan consultant can provide more detailed information on closing costs and the total cash to close for your purchase transaction.

4. Can you qualify for the monthly payment? Being comfortable with the budgeted payment is critical, but there are factors that will impact your ability to qualify for the monthly payment. Your credit score will impact your interest rate, mortgage insurance cost, and type of loan program available. Your type of income will be reviewed for reliability and recurrence. Lenders look at the stability in past history and the likelihood to continue in the future. Different types of loan programs have distinct debt-to-income ratio limits, so a loan consultant will run this calculation for you.

Check out these features with online mortgage calculators.

• Additional payments towards principal will take down your loan balance sooner. There are data fields that you can input monthly additional principal payments, extra payments at a specified frequency, or one-time large paydowns. You may be surprised as to how much additional payments shorten the term of the loan and the total interest paid over time.

• Review the amortization schedule. Whether in a graph form or a table form, the amortization schedule will demonstrate how much of the normal periodic payment will be allocated toward principal and interest. The initial monthly payments are weighted heavily towards interest in the initial years of the loan, so use the schedule to evaluate the impact of additional payments towards the beginning of the loan term.

Doing homework before a major investment like a home purchase is prudent. Our Hawaii loanDepot mortgage loan consultants can help assess your situation and offer tailored solutions while you are in the research, shopping or preapproval stages of your journey.

LLC NMLS ID 174457. Licensed as a Mortgage Loan Originator Company No. HI- 174457. This information is not intended to be an indication of loan qualification, loan approval or commitment to lend. Loans are subject to credit and property approval. Other limitations apply. Rates, terms and availability of programs are subject to change without notice.