Calculating for the Future: Understanding the Low Morgage Rates of Today

While seeing into your financial future can be difficult. Understanding a few key assumptions and numbers associated with your mortgage will allow you to get a good idea of the money you can be spending or saving in the years to come.

Today’s mortgage rates are the best in years, due to the slow economy and the housing market. Those wishing to apply for a loan may be pleased with the deals that are available. For instance, what is known as a jumbo loan now costs consumers less then ever. The current average rate for a thirty year fixed rate loan is approximately five percent. There are also rates available, depending on your personal circumstances, for as low as three and a half and four percent. To be eligible for these low rates, you will need to have a steady, good income, a down payment and a fairly low amount of debt.

How Do Consumer’s Qualify For Lower Rates?

To qualify for the lowest available rates, most consumers will have to pass several tests. There are a few general things that finance companies look for before first considering you for these low rates. One such qualification most banks and financial institutions require is for the prospective homebuyer to have proof that their total debt is not over forty percent of their income, before taxes. This includes debts such as car payments and credit card bills. You must also be able to show proof of your income and steady employment for up to several years. Your credit score has to be good, usually near seven hundred or better, which is quite high. And you almost always need to have a down payment of at least ten percent.

How to Use a Free Mortgage Calculator to Help Estimate Costs:

Using free mortgage calculators is fairly easy if you have the needed information on hand. If you are working with a realtor, they will be able to do the calculations for you. If not, you can easily use the tool yourself. The first step is to determine the principal amount that you will be paying on. Enter the amount on the mortgage or principal line of the calculator, which is almost always the first line. Next enter the number of years the loan is for. Enter the interest rate you’ve been given and click on the calculate button. The mortgage calculator should then give you the estimated mortgage you will be paying.

How to Use a Mortgage Calculator for the Future:

Most mortgage calculators are fitted with a tool that will allow you to estimate the possible value of your home in the future. To do this you will need to enter the home’s current value. You can usually get this information from real estate sites that include recently sold homes in your neighborhood, with houses that are similar to yours in age, size and appearance. Choose the year you would like to check to see what your home value might be, and enter it. Click on the key for appreciation rate. You can choose whether you would like to see the rates for several options, or for one just in your area.

Why Now is a Good Time to Get a Mortgage:

Recent marketing reports state that the prices of houses are becoming more stable. This is good news for those wishing to purchase a new home, or for those buying their first home. Although it is never possible to predict the outcome of the economy, today’s mortgage rates are some of the best ever for those who qualify.

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