How To Calculate Mortgage Payment Levels by primusboy

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									How To Calculate Mortgage Payment Levels
Once you have taken the decision to get a mortgage you need to
be able to work out how much you can afford to pay.
You can do this by performing a mortgage payment calculation.
There are certain considerations when you calculate mortgage
payment levels that suit you that you need to keep in mind:
How much mortgage can I afford? What type of mortgage should
I get? What kind of loan payment schedule suits me best?
As always it is best to start at the beginning. How much
mortgage can I afford: answering this question is easy - but
you must be honest with yourself! Look at your earnings and
savings and your expenses. How will these be affected by a
mortgage? Some expenses like rent will disappear when you are
a homeowner but a mortgage will bring other expenses (you may
have removal costs and you will almost certainly have legal
costs). An online financial calculator will allow you work
out exactly how much you can afford to commit to in a mortgage.
Now you must decide what kind of mortgage is best suited to
your needs. There are various types of mortgage but do not let
this put you off - the choice makes it easier to find a
mortgage that suits you best.
The two most common types of mortgages for homeowners
(commercial mortgage rates are applied to business premises)
are repayment mortgages and interest only mortgages. You can
also have a combination of the two.
With a repayment mortgage you pay off part of your mortgage
every month but with an interest mortgage only the interest
is paid off each month. When you consider what type suits you
remember that an interest only mortgage rate (always
calculate loan interest as well) will be considerably
smaller. Although this will appear attractive you will need
to be able to pay of the rest of the loan at the end of your
loan payment schedule. You can do this by investing money -
but poor investments will lead to a shortfall and you will
need to take advice at how to invest money so that it grows
with your mortgage.
When you have settled on a mortgage that suits you (you will
find a weekly mortgage calculator allows you to break your
finances down better than a monthly breakdown) there are
other still a few more things to consider. What are your
mortgage closing costs? These might make the final amount
you pay much higher - especially if you pay your mortgage
offer quicker than the original loan payment schedule. Are
you able to claim any discounts like small business tax
deductions? What are the bank loan rates (an interest rate
calculation will help you here)? You might also be affected
by mortgage loan origination - check your mortgage provider
is dealing with your mortgage themselves and not farming it
out as this may increase the amount you pay. It is always
best to shop around and find the best deal!
When you calculate mortgage payment levels that suit you
should know what you can afford. After that it is easy to
calculate a payment that is tailor made to suit you best.
James Grantworth is the Marketing Director for Let Mortgages Limited, a
company specializing in Buy To Let Mortgages for the investor who wants
to build a portfolio quickly & with the absolute minimum capital
investment. For full details of our 'no money down' Buy To Let Mortgage
deals visit: http://www.letmortgages.com

								
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