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How To Calculate Mortgage Payment Levels

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					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'll 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 don't 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'll 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.

				
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