A mortgage calculator can be a great tool for potential Richmond Hill homeowners, helping to lay out various options and financial implications. Mortgage calculators can help determine how much house a first-time buyer can afford before getting too far into the process, taking into account the price of the house, yearly income, amortization, and costs involved with purchasing a house.

 

Mortgage calculators can also be helpful for existing homeowners to see if they have the best mortgage available for their current financial situation. Here are a few ways that existing homeowners may want to change the numbers on their mortgage.

 

 

Second mortgages help homeowners take advantage of the equity in their home. While no one is suggesting building unlimited debt is a good thing, there are times when a second mortgage can be part of a solid financial plan. The following are examples of situations during which acquiring a second mortgage makes sense:

• Consolidating high-interest credit card debt
• Paying for home renovations that will increase the value of your home
• Paying for education
• Financing a viable business venture

A second mortgage works like a first mortgage, with fixed payments and amortization periods. Typically, second mortgages have a higher rate of interest as they are more of a financial risk for the lender.

 

Before taking on more debt, crunch the numbers with into a mortgage calculator to get an accurate snapshot of monthly payments and the total interest that will be paid. You will need to know the mortgage amount, payment type (monthly or bi-weekly) and projected interest rate. By varying the amortization (how long it will take to pay the mortgage off in full), the calculator can help you determine a payment schedule that makes sense.  

 

If your financial circumstances have changed, you may want to refinance your mortgage. Perhaps interest rates have dropped, and you want to increase your payments or make a significant payment towards the principal. If a homeowner has recently become unemployed or ill, refinancing can allow for lower monthly payments.  A refinancing mortgage calculator can quickly show the advantages of refinancing, as it lets you compare the costs and financial implications of different mortgage terms. Make sure you allow for refinancing costs and prepayment penalties.

 

 

Before entering into a significant financial arrangement, it’s important to understand your personal finances and know what you can comfortably afford. Have a clear idea of your financial goals. Gather as much information as you can.  A great place to start is the Financial Consumer Agency of Canada, which has a number of tips on how to keep your finances in order. Use a mortgage calculator early in the process to fully understand what financial costs are involved.

 

 

Once you are armed with all the facts and figures you think you need, speak to a mortgage specialist. If you are intimidated by the big banks, find a reputable independent lender, preferably one that is a member of the Independent Mortgage Brokers Association of Ontario.

 

Once you’ve built up equity in your home, it’s time to get out that mortgage calculator again. Richmond Hill homeowners have a variety of options to reach new fiscal goals.