If you are thinking about buying any type of property, there will usually be a mortgage attached. That is, unless you pay the total in cash, which is unusual. As potential buyers begin to make their plans, they can do themselves a great service by determining their own general budget before consulting with a lender, or working with a real estate professional.
One of the seemingly great mysteries for consumers is, “What will my monthly payment be?” If you’ve never made use of an amortization table, it’s easy and, well, fun! Here’s good one!
If you know what the current interest rates are, and the length of loan you are looking for, the remaining variable to make use of this helpful tool is the price of the house you’d like to buy. You can experiment by adjusting the price, term of the loan, and interest rate to see how these changes will impact your potential payment.
But making use of an amortization table is not simply an exercise in determining the price of home you can afford, it is a great way to shop for a loan ahead of time, to see which product might be right for you. If you’re trying to find out if your ratios will qualify, the amortization table can assist you in adjusting the parameters up or down, until you get the right fit. You may be surprised to learn that you need to set your sights higher or lower, depending on the outcome.
Once you’ve got your figures in the ballpark, then it’s time to make a call and sit down with your agent and start the fine-tuning. Your real estate professional will know the absolutes, but you can still make a general assessment in advance and save everyone, especially you, a lot of time in the process!