You’d think an online calculator is a pretty straightforward device, and one that you should be able to place your full confidence in. For the most part, they are. The numbers are reliable, but how you interpret those numbers? Not so much, especially if the goal is mortgage qualification.

If you rely on the numbers from an online calculator without talking to a mortgage professional, you will be misinformed. An online mortgage calculator can help calculate mortgage payments, or help you assess how additional payments would impact your amortization. However, they will never be able to give you an exact picture of what you can actually afford and how a lender will consider your mortgage application.

Mortgage lending is subjective

While mortgage calculators are objective, mortgage lending isn’t. It’s 100 per cent subjective. A lender will consider your financial situation, employment, credit history, assets, liabilities, the property you are looking to purchase, and then compare that with whatever risk profile they currently have the appetite to lend to. Simply put, they don’t just look at the numbers.

An online calculator is a great tool to help you run different financial scenarios and assess your comfort level with different payment schedules and mortgage amounts. However, please don’t rely on an online calculator for mortgage qualification purposes.

When the time is right, the very first step in the mortgage qualification process is a preapproval. A preapproval will take a look at all the variables on your application, assess your financial situation, and provide you with a framework to buy a property, based on your unique circumstance. Securing a preapproval comes at no cost to you, with no obligation to buy. It will simply allow you the freedom to move ahead with confidence, knowing exactly where you stand. This is something a calculator is unable to do.

If you would like to talk more about your financial situation, please contact me anytime!