How do you decide upon a certain loan amount for home loans? How can you compare & contrast between different types of loans? How will you compute upfront costs? These are important questions to consider before applying for loans – you should proceed in methodically, or else everything will go haywire.
Here are a few tools and calculators that can help you out:
Amount to be borrowed
This calculator gives you a clear insight as to how much you can borrow by considering parameters like number of borrowers, annual income before tax, miscellaneous income sources, household expenses, income from property rentals, and so on.
It is more or less an extension, or rather the next step after you compute the amount that you can borrow. It uses interest rates, the term of loan, and the borrowed amount. There is a separate option too in case interest rates change.
It is simple to calculate the amount you can save on a regular basis, in order to achieve your goals sooner than you thought. Input your present income based on these parameters – weekly, monthly, quarterly, or annually. This is gross salary, which is the income before taxes are levied on it. Custom configuration is also possible. Enter varying amounts to check how the overall budget is affected.
As is evident from the name, this tool is used to state how much cash is required upfront for properties. You input the type of property you are searching for, the preferred area, purpose of buying, your savings, and the worth of the property you are aiming for. The computations are quite straightforward.
Loan protection premium
It is always better to be prepared for unexpected situations rather than repent later on. Loan protection helps to clear your loan or cover repayments in case something unforeseen occurs. Before calculating this amount, make sure you are well-versed about its terms & conditions, which include benefits, limitations, waiting periods etc.
This option is strictly for newbies – if you are buying a property for the very first time, you need to compare between a couple of loans to find out which one is more lucrative and suitable. Use variables like loan term and interest rates for this purpose.
It is advisable to consult a financial advisor regarding such matters after you have used the necessary tools and calculators. The numbers are quite precise, but you need someone to guide you in the right direction, which is exactly what advisors are supposed to do.