Mortgage CalculatorHow many homes can you afford? Fairday Realty brings you a mortgage calculator to help you determine the amount you can borrow. All you need to do is type in the details of your mortgage including purchase price, down payment, mortgage term, interest rate, property taxes and property insurance. From there, we can give you a rough estimate of what you should expect to pay on a monthly basis Knowing how many homes you can expect to pay on a monthly basis helps you pinpoint what property is a good fit for you. Our agents can guide you through Fairfield County, CT real estate and show you homes that closely match your criteria, as well as help you avoid any potential pitfalls of buying a home.
Securing financing is a major step towards buying a home. Here’s what you need to know about mortgages.
Types of mortgages
- Fixed rate mortgages (FRMs) This mortgage type has a fixed interest rate throughout the life cycle of the loan, and payments stay the same in the subsequent months and years. This is the case even for long-term financing options like 30-year loans. FRMs allow buyers to know, almost to the penny, how much their monthly payments will be. This allows them to set a monthly budget and stick to it. The predictability of this mortgage type makes it a popular choice among homebuyers.
- Adjustable rate mortgages (ARMs) This type of mortgage has variable interest rates. The initial rate is often set below the market rate for a comparable fixed-rate mortgage. There is a fixed period wherein the initial interest rate stays constant. This fixed-rate period can last anywhere from a month to a decade. Fixed-rate periods that are shorter often have lower initial interest rates. After this, the mortgage “resets” or carries a new interest rate that is based on present market rates. In other words, the interest rate “adjusts” and can fluctuate up or down depending upon the movement of the applicable market rates. Aside from the low initial rate, the main advantage of ARMs is that you could end up with lower monthly payments as the market rate drops. However, there is also the risk that if market rates increase, you could also end up with higher monthly payments.