Can I rely on the accuracy of a How Much Can I Borrow Loan Calculator?
My friend was looking at refinancing her mortgage in Australia but was unsure as to the long-term benefits of such a move. She had heard about a loan calculator that could compare products and wanted to run her own scenario. We tracked down one loan calculator but this was a simple how much can I borrow calculator.
With these questions in mind it is important to select the right loan calculator for your needs. There are hundreds of loan calculators available online and most banks, financial institutions and some mortgage broker websites give visitors free access to their online home loan calculators.
It’s important not to take what is calculated as 100% accurate. There are always other factors to be taken into consideration when working out how much you can borrow or how much your repayments are going to be.
A lender will not just look at your Assets and Liabilities and income but also the number dependents you have and the time you have been in your current employment and enjoying the income, your savings history, and particularly your credit history.
Although a loan calculator may have indicated a borrowing capacity of say $250,000 it is unlikely any lender in standard mortgages will advance funds if you have a poor credit history. One or possibly two explainable and minor defaults may not impact on the approval process but a number of defaults or judgements, or a single default on a large loan will definitely go against you.
Furthermore, these mortgage calculators do not factor in some important benefits particularly a 100% offset loan feature or a Company Car or Employer Benefits. By all means use a mortgage calculator as a guide but before committing to any fees or paying a deposit on a new purchase, check with a mortgage broker or other lender to make sure you and your mortgage calculator are on the right track. Before refinancing it is always a good idea to speak with your existing lender.
The best decision on what home loan calculator to use should probably boil down to what country and what state you live in. For example if you lived in Western Australia, the best home loan calculator for you to use should probably be from Western Australia. This way you can be sure that all government incentives and rates are applicable.The First West Home Loans suite of calculators gives you the tools you need to give you an idea about your mortgage options. It is a great place to start for those looking at getting a home loan, regardless of whether you’re a first home buyer, investment buying, non conforming buyer or just looking at refinancing.
Remember: It is wise to take the figures quoted in the loan calculators as a rough estimate only. For accurate assessments contact an expert.
In Australia, a mortgage calculator can be useful but do not rely on it solely when making finance decisions that will have a significant impact on your cash flow over 25 to 30 years.
