If you are thinking of acquiring a property and you need financing, but you do not know how much you can afford, one of your best allies will undoubtedly be the credit prequalifier or a mortgage credit simulator.
We will begin by explaining the operation of a mortgage credit simulator but first, we will define what it is specifically.
The mortgage credit simulator is a calculator that shows you an estimate of the installments and the time of the mortgage loan.
It helps applicants for a loan application to make an oriented and conscious decision regarding the expenses and deadlines that are part of their future acquisition.
In addition, the mortgage credit simulator allows you to evaluate the options and payment conditions to which they will be submitted when choosing the financing that best suits your budget.
Operation of a mortgage credit simulator
Almost all financial institutions have credit simulators, their purpose is that users have a clearer idea of how much they are going to pay and how they are going to pay it.
This type of instrument to calculate a mortgage credit is used internally by financial institutions.
To make use of a mortgage credit simulator it is necessary that you go to a commercial advisor to run the simulator.
In general, calculators vary depending on the financial institution, since they may have specific rules for each company, although they basically have the same functions.
The mortgage credit simulator will work as follows:
The commercial advisor will ask you to tell him the amount of financing you need to be able to acquire your house or apartment.
The intention is that the mortgage credit simulator will give you an approximate figure of what the financial institution could grant you, this sum will be calculated with other data such as income and down payment.
Another function of the mortgage credit simulator is that it also indicates the term in which you could pay off the financing.
However, the average estimated payment time they handle is a minimum of 5 years and a maximum of 20.
In this period, applicants must make the monthly deposits that the mortgage credit simulator throws in order not to generate interest that increases their debt.
This option is extremely important for any applicant for a loan, as it is the one to which they will commit to pay the absolute amount that the financial institution provided.
3.-Value of the property
You have the option of calculating your mortgage credit with the value of the property. You will get the result depending on your income, the down payment and the time in which you will pay the property.
It is very important that you have the exact value of the property you want to buy on hand so that the mortgage credit simulator can give you a more accurate result.
It should be noted that each financial company offers different types of credit amounts, so we suggest consulting the mortgage credit simulator of more than one financial company.
In your case, a credit prequalifier, another tool that helps you calculate your credit with a breakdown of its variants.
In the down payment option within the mortgage credit simulator, you must place a percentage of the total value of the property.
The down payment figure that finance companies ask to grant a loan is between 10 and 20 percent minimum, although it varies depending on the institution.
You must also record the total value of the property, so the mortgage credit simulator will show you the monthly amount that you must contribute to the financial institution that will grant you the financing.
The objective of using a mortgage credit simulator is to identify your chances of paying off your debt in a given period of time.
Also so that you clearly know the interest amounts that you must cover in case of not making the payments in a timely manner.
However, you should consider that this tool is used to obtain an estimate of the expense to be made, since the result is variable and is only used internally.
Now that you know how a mortgage credit simulator works, we are going to explain how the credit prequalifier works, specifically what it is and how it works.
The credit prequalifier is a tool with which you can obtain an approximate scenario about the financing line that a specific financial institution can offer you.
In order for you to obtain this information, it will be necessary for you to enter personal information such as your name, property price, the term in which you want to pay it, how much your monthly income is. etc.
These are necessary data so that the financial institution knows you better and can produce a result according to your situation and the analysis of your profile.
The credit prequalifier gives you a preliminary result, that is, an estimate of the amount of financing that can be granted to you when they give you a loan.
It also shows you how much you are going to pay and for how long, that is, the monthly payments and the term to pay off the credit.
With this information at hand, you will be able to evaluate what your possibilities are, so that you avoid running out of capital or, if you can ask for a much larger financing.
But be very clear about this, the result of both a credit prequalifier and a mortgage credit simulator is preliminary.
That is, subject to some changes, so it is necessary that you add all the data that is possible correctly.