There are some things that are certain to happen during your lifetime and enrolling into a mortgage plan is one of them. I am pretty sure that 99% of our generation has enrolled into a mortgage plan at least once in their lifetimes. Be it small things lie mobile phones, sim plans, cars or property; everything around is sold through mortgage deals.
Mortgages have been in existence since thousands of years and its history can be traced back to many civilizations. The concept of mortgaging has altered over the centuries however the basic notion has remained the same. Mortgage is a contract between mortgagor and mortgage for the sale of an asset (usually a land or house) over a period of time through a payment schedule.
In simpler words it’s an agreement between two parties for the sale of an asset by one party to the other party with the latter paying the price of the asset in installments.
Mortgage deals mostly serve to be beneficial for both the parties involved. How so? Well, we will explain it to you with the help of an example. Suppose you want to buy a house because you are tired of paying the $1500 rent per month. So you search for a house but which ever house you think of buying turns out to be out of your budget. Normally houses these days land in the value of two to three hundred thousand dollars which is way above the purchasing power of a middle class individual.
So mortgage companies offer you a way out of this problem, they take whatever down payment 20/30% you are easily able to give and adjust the remaining into a payment schedule that you can pay over the next 10 to 20 years. Off course the amount you will pay over time will be higher as an interest rate will be applied over it. However, in this entire process you will be able to make your own asset that will be valued at a much higher time by the time you finish your installments.
The monthly mortgage schedules are almost in amount to the rent you have been paying to your land lord (sometimes it’s even lesser). This is one of the primary reason of why the American mortgage market has seen huge booms over the last few decades. With banks, credit unions and other financial institutions willing to lend at lesser interest rates than ever before, the demand and subscriptions of mortgages has seen an all-time high.
All that you have read about mortgages until now is probably presenting you an all-clear and flowery picture of how good mortgage deals are and that you should avail them. However, as you all have heard that everything that shines is not gold. This phrase is as accurate as it gets when describing mortgage plans.
On the face everything seems crystal clear and easy going however things are very different in reality. Every year there are thousands of bankruptcies declared and millions of mortgage plans being defaulted. There are many reasons for this but one of the primary reasons is that most home and car owners usually get themselves stuck in mortgage plans that they cannot afford.
Usually people get carried away into buying fancy cars and luxury homes that their pocket cannot bear the burden off. People themselves miscalculate their expenses or are lured into plans by specialist mortgage sellers who trick people into buying the wrong mortgage plans.
Purchasing a mortgage plan is not a bad idea however enrolling yourself into the wrong mortgage plan is the worst thing that you can do to ruin your financial standing. To counter this problem a very unique and helpful website has been up and running since 2008 by the name of “Mortgage calculator” which is a very simple to use website that helps people in making the right mortgage decisions. The website is equipped with multiple tools like calculators, guidelines and up to date mortgage plans that one can make use of while making financial decisions.
The website is pretty handy if you are looking into mortgage plans but are unable to find the right one for yourself. It has a simple mortgage calculator in which you can input the price of the asset, the down payment you are willing to do and the tenor of your installment schedule. The calculator will automatically take into account the interest rates being offered for the period you have chosen and display you your installment schedule and the total amount you will end up paying.
Moreover, it also displays the complete amortization schedule for the number of years involved so for example you choose 30 years plan so it will display the amortization schedule for 30 years. This will help you in planning your financial decisions and making sure that you do not fumble in the process.
There is more on the platform to help you: The website tells you the mechanism of how debt to income ratio works which is actually a very handy tool to tell you that weather you should buy a house or not. The ratio estimates the ability of the lender to repay the amount taking into account his income. If your debt to income ratio falls near about 30% or lesser than you are in safe waters to pursue the dream of buying your own house.
It also tells about what your home loan limit can be that will be easily approved by lending financial institutions. The website is a universe when it comes to information about mortgaging. There are advanced mortgage calculating tools which include loan payment charts, insurance costs, closing costs and hidden costs that may be attached to mortgage plans.
Large Financial decisions are never easy to make, hence, one should always do their homework before indulging in to a financial decision such as taking a mortgage for house. There are many websites, magazines and financial experts around that can help you in your decision making.
Websites such as Investing, Bloomberg and Business Insider often keep publishing material that is very useful in your financial decisions. Government surveys, credit unions and microfinance institutes are also active when it comes to aiding people in financial decision making. So next time you are making a financial decision, you know what path to take!