Are Mortgage Calculators Accurate?

When you’re looking at buying a new property, one of the first things you want to know is your budget. For many people, that will depend on their mortgage options, and understanding what you can afford can be a little tricky. 

A simple option is to turn to an online tool, but are online mortgage calculators accurate?

What Can Mortgage Calculators Tell You?

When you’re looking to buy a house, one of the most important considerations is finances. 

You want to find your dream home, but you’ve also got to make sure you’re not over-extending yourself financially. A big part of this is understanding your mortgage options and a mortgage calculator can help you do this. 

If you’re just beginning the research phase of your property search, you don’t want to spend all your time looking at mortgages. You want to quickly get an idea of what properties you can afford without going through all the formalities. 

Mortgage calculators can tell you details like:

• Affordable property range: This will show you what your maximum price range might be while keeping a sustainable debt-to-income ratio. Of course, there will always be a little wiggle room in this number, but it’s a good guide for your upper limit.
• Payment breakdown: Payment breakdown shows you how much you can expect to pay monthly. This includes principal and interest payments.
• Loan repayment term: Mortgages can be repaid over varying time periods. Options generally include 30-year fixed, 25-year fixed, 20-year fixed, 15-year fixed, and 10-year fixed.
• Interest rate: Your interest rate will depend on many factors such as credit rating. This will vary between each person, but an average interest rate can give you an idea of what your interest payments might look like.
• Property tax: Property taxes are based on a home’s value and they vary by location. A local mortgage calculator will give you the best idea of what you’re likely to pay in property tax.

In these cases, a mortgage calculator is an ideal tool, but how accurate are the online mortgage calculators?

How Accurate Are Mortgage Calculators?

The one thing everyone wants to know is are mortgage calculators accurate?

The important thing to remember here is that they’re a guide. Many different variables go into deciding what your mortgage looks like, and even different mortgage providers will ultimately give you different prices. 

What really matters with a mortgage calculator is the information you put into it. If you put lots of accurate information in, then you’re more likely to get results that reflect your mortgage options. 

In this way, the best mortgage calculators can be fairly accurate. 

This is particularly important at the beginning of your property search as it gives you a good feel for what you can afford. Of course, as you come closer to making a purchase, you’ll want to have concrete mortgage options rather than just a rough guide. 

In the meantime, mortgage calculators are accurate enough to help you begin your property search.

When Is a Mortgage Calculator Useful?

A mortgage calculator is most useful at the beginning of your market research. 

It’s a great way to get a feel for the kind of properties and neighborhoods you can afford. You probably have a rough idea about this based on your income and other factors, but it’s useful to narrow in on this information and give yourself a more definitive budget. 

Once you’ve got a clearer picture of what you can afford, then you can browse properties with more confidence. 

No mortgage calculator is a substitute for actually having a mortgage approved, but it is a good step that can add impetus to your property search. The more accurate the mortgage calculator, the better you will understand your budget, allowing you to streamline your search. 

It’s Not Just About the Mortgage Repayments

To get a clear picture of your overall costs, it’s necessary to look beyond just mortgage repayments. There are other costs associated with buying a house that can also put a strain on your finances. 

If your mortgage calculator doesn’t consider costs such as closing costs, fees, and taxes, then it won’t give you the full picture. 

This is why it helps to use a mortgage calculator that’s specific to the area you’re looking to buy in. For example, our mortgage calculator for New Orleans considers specific variables relating to the costs of buying in the city. 

It’s also worth remembering that your real estate agent should be able to help you with specialist knowledge in this area. The mortgage calculator can give you a rough idea of your mortgage repayments, and then the realtor can help give you a more complete picture of your costs.  

How Should I Calculate My Mortgage?

For some people, there’s always a doubt in their mind: “are mortgage calculators accurate?”

The answer is, they can be accurate when they ask for the right information and you provide them with accurate information. In these cases, a mortgage calculator is an excellent first step in understanding your budget. 

When you have an idea of what your payments might look like, then you can start researching properties and comparing your options. The more serious you become with your search, the more you should consider talking to a mortgage specialist to give you a more definitive answer. 

Armed with the basic information from the mortgage calculator, you can go into that meeting with a good idea of what to expect, so there aren’t likely to be any nasty surprises. 

Working with your real estate agent and mortgage specialist, you can then take tangible steps towards buying your new property. 

Understanding Your Mortgage Options in New Orleans

To get the best idea of what property you can afford in New Orleans, it’s best to use a local New Orleans mortgage calculator. This will help you get a good picture of the specific fees for the area and kickstart your property search. 

As well as using a mortgage calculator, remember that experienced local realtors will be able to help you get the most out of your budget. They know all the ins and outs of the area and are a fountain of knowledge you need to tap into. 

Start your New Orleans property search by using our mortgage calculator and don’t hesitate to ask us for help!