This amortization schedule also shows when the borrower will no longer be required to pay PMI.Ī mortgage affordability calculator focuses on the borrower and their monthly incomes vs. In that case, this calculator showcases a factor known as private mortgage insurance (PMI), which will be an added cost for the borrower until they reach a certain percentage of loan to value (LTV).Īs a bonus, a loan officer can use a detailed breakdown of the loan balance year over year to generate an amortization schedule. Suppose the down payment is below the standard 20%. This calculator provides the lender with a breakdown of their monthly mortgage payment showing interest and principal reduction. A mortgage payment calculator creates an amortization schedule based on the loan amount, interest rate, down payment and loan term (typically calculated in years). There are many unique calculators that can educate borrowers and increase the volume of digital leads.Ī mortgage payment calculator is a tried-and-true solution for any borrower looking at financing options for their home purchase. Mortgage calculators are not a one-size-fits-all-tool. Once in the system, the lender can communicate with the potential borrower and guide them through the loan application process. Lenders can fix this issue by adding a clickable link where the prospective borrower enrolls themself into the lender’s mortgage CRM. If all the calculator does is provide the answer to the borrower without any follow-up communication or calls to action, the lender is not guaranteed to win the business. The best mortgage calculators use “microtransactions,” spacing out the questions in phases to make the calculator feel less daunting.Īnother factor for lenders to consider is how the calculator they use feeds into their marketing automation. Misinformation can cause frustration for the borrower, who may feel like they are a victim of a “bait and switch,” potentially souring the borrower’s relationship before it ever really began. If the information entered by the borrower is not thorough, the calculator will give an inaccurate answer. However, this can create challenges for lenders who use these mortgage calculators as a part of their lead generation strategy. A great mortgage calculator collects the right amount of information for the mortgage lender without overwhelming the borrower.
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