Having trouble finding the right mortgage? Feeling lost and unsure of how to tell which home loan options are the best? Now there are more tools than ever to help you make that decision. Perhaps the most beneficial of all is a calculator tool available for anyone to use online. Read on for more information on how to use a mortgage comparison calculator. Then go on to find and secure the best home loan. Start By Figuring Out Your Budget Before you start plugging numbers into a calculator, you should have a general idea of the type of home loan you are looking for. This includes knowing what your budget should be. Even if you have a general range in mind, it’ll help to narrow things down. Figuring out your budget also guides you toward discovering the best kind of home loan for your situation. For instance, you’ll have to decide if a 15-year or 30-year loan term is a better match for your finances. Having a budget helps you make your calculations with the most educated figures. That way, you’ll be able to use the mortgage comparison calculator to its greatest and most successful effect. Compare Different Types of Home Loan Options There are different kinds of mortgages that can be applied when using a comparison calculator. These can include conventional, fixed-rate, adjustable-rate, FHA, USDA, VA, jumbo loans, and so on. Learn as much as you can about the differences between these options. Look into the pros and cons of each and which ones you might be eligible for. Ultimately, of course, the deciding factor is which is best for your individual situation. And once you’ve adequately prepared by following the steps above, you’ll be able to use this calculator most effectively. What Numbers Are Used in a Mortgage Comparison Calculator? The most significant number that you’ll use with the calculator is the loan amount. To figure this out, just subtract the down payment amount from the purchase price. In addition to the loan amount, the numbers used in a mortgage comparison calculator include the interest rate, home price or value, down payment or equity, annual property tax, private mortgage insurance (or PMI), annual home insurance premium, the loan term, and the start date. Estimates of property taxes and home insurance premiums are often included in listings. By entering these numbers into the calculator, you’ll be able to get an accurate idea of your monthly payment. How To Use a Mortgage Comparison Calculator for Best Loan Term The most common mortgage terms are 15- and 30-year periods. It’s understandable that determining your best option when there’s a difference of a decade can seem very daunting. Thankfully, mortgage comparison calculators, like this one at Capital Credit Union, can show which option will help you save more. That way, you’ll feel much more confident in making an informed decision. You’ll have to decide if you want a longer- or shorter-term loan. On the one hand, with a longer term, you pay a smaller amount per month over a longer period of time. with a shorter term, you pay more per month but pay off your home loan sooner rather than later. This means you’ll pay less in interest over the life of the loan. Some homebuyers may be able to decide just based on that general idea. But most people, especially when it comes to major financial decisions, want a more specific idea of the amount. That’s where a comparison calculator can be useful. Having the figures right in front of you will help you determine if it’s worth the savings to choose a longer loan term. A stretch of 15 to 30 years is the big picture. But these calculators break it down so you will see both how much you’d pay per month and how much you’d pay overall. That gives a better idea of how it will affect everyday finances. Understanding What Impacts Interest Rates Some mortgage comparison calculators will ask you to enter the interest rates you want to compare. Others will do the calculations for you based on the information you enter, the current market, or what a particular lender is offering. In general, interest rates will be affected by your individual circumstances. Lenders consider your income, employment history, debt, credit score, and how much you’re putting in for a down payment. The higher your down payment, the better your rates usually are. The loan term also factors in here. Typically, shorter-term mortgages have lower rates because they are less of a risk to the lender. Different lenders also offer different interest rates. If you’re trying to decide between lenders, plugging different rates into a calculator will give you the best big picture. Some lenders may offer special rates or resources for those with lower credit scores, higher debt-to-income ratios, or who are first-time home buyers, so research your options. How To Use a Mortgage Calculator to Consult With a Loan Officer If this is your first time searching for a home loan, or you just want an expert opinion, don’t hesitate to contact a loan officer. Having a professional on your side will definitely help you figure out the best solution. You can also ask any and all questions. While you can find guidance and resources online, this is a way to ask questions and get feedback on your very specific situation. Using a mortgage comparison calculator will help you have even more information and questions to discuss with one of these officers. You can also ask if there’s anything you overlooked that may have skewed the results. Where can you find one of these helpful calculators? They are available on many lenders’ websites. You can use Capital Credit Union’s mortgage comparison calculator. On this website, you’ll also find a host of information on mortgages and other financial education topics to help you make the best financial decisions you can. If you’re located in northeast Wisconsin and interested in applying for a mortgage, you can start the application from the website too.