Sort your finances through mortgage calculators

Sort your finances through mortgage calculatorsImage Credit: Supplied

A house is the single largest substantial investment that one would undertake in a lifetime. When allocating a property investment budget, there are several calculations that are required to be made at each stage. To assist us in these calculations, we fall back on the various types of mortgage calculators.

Simple mortgage calculators help calculate simple things, namely: rate of interest (ROI), equated monthly installments (EMI) and amortization schedule. By plugging in variables like the loan amount and loan tenor, they help calculate the interest rate and monthly payments.

Advanced calculators assist in the more difficult calculations. If you are weary of terms such as debt burden ratio (DBR), transaction fee, mortgage fee and others, you should seek the assistance of these calculators.

The DBR calculator calculates your borrowing eligibility by providing a simple ratio of the total debt over total assets. The transaction fee calculators demand basic variables such as property value, down payment percentage and confirmation of whether the property is ready/off-plan to arrive at a detailed list of transaction fees applicable in any property transaction. Transaction fees are basically broken up into agent fees and registration fees. In the case of a ready property, the latter is payable once. However, in the case of an off-plan property, a pre-registration fee (oqood) is payable additionally. Finally, there is the mortgage fee calculator that calculates the mortgage processing fees and valuation charges payable by the property owner to banks/mortgage providers.

Besides the above technical calculations, mortgage calculators go a step ahead and assist you in taking some fundamental decisions such as buy vs. rent. They compare the costs associated with buying vs. renting a property, and come up with a handy and easy-to-decipher comparison table. To enable the calculator to arrive at accurate results, you are required to input details such as property value, interest rate, fees, loan tenor and others.

Most of these calculators can be accessed online and arrive at a fairly reasonable estimation on any real estate-related calculations that you might be on the lookout for. Besides, they can be accessed free of charge and help answer all your financial planning questions within the comfort of your own home.

Handy Hints:

• Mortgage calculators help investors simplify mortgage-related calculations

• They help answer technical and fundamental queries related to real estate

• They can be accessed online for free and in the comfort of one’s own home

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Source: Priyanka Wade, Special to Properties

The writer is a freelancer


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