Home loan calculators are used by many people to work out how much they can borrow. The problem is the result they get, more often than not, is far from true!

That’s because banks take into account a lot of factors than most home loans calculator websites do when working out how much they are prepared to lend you and they can’t load every factor into home loan calculators they place on their websites.

Let’s take a look at the process step by step.

• First a bank needs to know that you have a clean credit history. If you have had problems in the past, for example defaulting on a loan repayment or having had a court judgement entered against you, it will show up in your credit report. A bank is not able to access your credit file without your permission and you have to give your written permission too. So, you can appreciate that home loan calculators cannot take this into account.
• Your employment history is also very important when assessing your home loan application. Again, online home loan calculators don’t allow you to input your work history details, so although the calculator tells you that you can qualify for a loan of $500,000, it may not be true at all.
• One of the important factors to consider is whether your on going living expenses allow you to afford the loan. Most home loan calculators don’t give you the chance to explain this, so once again, the result you get might be very different when you actually lodge your home loan application.
• Recent changes to the law mean that lenders must be careful not to give you a loan that is unsuitable for you, so they are very careful to get a complete picture of you as a borrower. This process means that home loan calculators are only a part of a longer and larger process that make sure you can afford the mortgage repayments.

Sites like Canstar will confirm this for you.

Home Loan Calculators, Are They Useful?

The best you can expect from home loan calculators is to find out whether you are in the ballpark of a particular lender’s mortgage lending criteria. So, take the result you get with a grain of salt and instead, consult an expert to get a better idea.

If I Don’t Use Home Loan Calculators What Can I Do?

The best, and easiest thing is to ring a mortgage broker. For example, I have developed a 3 minute test that will give you a much better idea about the chances of having your home loan application approved.

Find out for yourself and phone me now on:

1300 133 193.

Where Can I Find a Good Calculator?

Don’t rely completely on online home loan calculators, but if you want to use one of the more helpful ones online go HERE.

So, although home loan calculators have a place, don’t rely on them completely.