Loan Calculators Mortgage Calculator Can Be Misleading

Loan Calculators Mortgage Calculator Can Give Misleading Results

Here's a short piece which explains loan calculators and mortgage calculators. I've seen web sites that have over a hundred different ones listed for calculating every possible scenario dealing with loans, home equity, prepayment, etc.. But the fact is, unless you already know what your various loan options are, they're all pretty much useless. Anyone can easily see that a loan with a lower interest rate is better than one with a higher rate, all other things being equal. But suppose the lower rate loan has a 3 year prepayment penalty, and requires mortgage insurance, and has a 5 year balloon payment. Then which one is a better deal? A licensed Mortgage Broker can look at all your options and help you figure it out. If you're definitely planning on moving in about 4 years for example, then the lower interest rate might be a better deal, but if might have to move in less than 3 years (relocating for work, for example) then the higher rate is probably much better.

If you still want to look at some options using a mortgage calculator, this article has some links to a basic one. Plus there are some links to other parts of the Star Mortgage web site. If your really serious about getting your best deal on a mortgage, visit the site, or give them a call at 813-882-8878.

Why a Mortgage Calculator or a Loan Calculator can be Misleading
Star Mortgage does offer you a free Loan Calculators Mortgage Calculator page to allow you to compute your own Mortgage Payments. But the problem with any automated Mortgage Payment Calculator or Loan Calculator is that it can only compute your P & I (principal & interest) payment. There may be other components to your total mortgage payment, such as taxes and insurance, that no Mortgage Calculator can calculate. Of course, anyone can give you a "guesstimate" of what these will equal. Just take the value of your house (say $200,000) and multiply it by .0015 and .0030 (this gives you $300.00 and $600.00). That's approximately what your taxes and insurance payment will equal each month, somewhere between $300 and $600. Some calculators that claim to compute taxes and insurance will use $450 (split the difference) and tell you that is what it will be. But it is just as likely to be a lot more, or a lot less. Depending on the area the house is located in, taxes on a home of similar cost could be double the estimate or more, and the necessity of having flood insurance in some areas can cause the insurance estimate to more than double!

Also, you need to be familiar with Mortgage Rates in order to use the Mortgage Calculator effectively. Some companies advertise really low mortgage rates, even for bad credit loans and finance loan refinance options, but when you call them only a small percentage of borrowers actually qualify for those rates. Using their advertised Mortgage Rates can cause the Loan Calculators Mortgage Calculator to give you a payment well below what your actual mortgage payment will be. The best Mortgage Rates available to YOU, with your particular situation, may be higher or lower than any rate you could quote as a general rule.

Mortgage Rates are also very much prone to change on a weekly, or sometimes daily, basis. Since brokers deal with a large, nationwide network of lenders, to list all of their current mortgage rates for all of their different programs and keep them all updated on a daily basis is extremely difficult. Plus, you still might not know which Mortgage Rate to use in the loan calculator to come up with a reasonable result. Most borrowers have very little idea of the wide variety of options available to them. Even bad credit loans and finance loans refinance programs can have very reasonable Mortgage Rates for someone with less than perfect credit.

So, please use Loan Calculators or Mortgage Calculators at your own risk. Or better yet, give Star Mortgage/Crow Processing a call at 813-882-8878, and they'll help you figure out the plan with the best rate and terms for your particular situation. Then you can use this Mortgage Calculator to compare the payments for the different options they've found for you. With this information in your hands, you can use the Mortgage Payment Calculator to confirm which plan will save YOU the most money.


Subscribe to this feed, or stop back later for a look at some of the options available to people with less than perfect credit. Even if you have some problems, you can still buy a home and find a mortgage that will fit your needs.

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