When a $400,000 house can be much cheaper than a $350,000 house, you can see how people fall down when it comes to making financial decisions. For the common man not versed in investments, equity and financial projections, what seems like a simple arithmetic task rapidly spirals out of control. If you look at the credit bubble which burst over much of the western world in 2008 you can see how irresponsible lending, irresponsible borrowing and the reliance on the value of a house increasing to secure a family’s future can lead to a catastrophe. What looks like a little bit more ends up being a lot more under many circumstances.
I bet many want to stay as far away from the volatile market right now. But hey, we have to make choices sooner or later. Ultimately, long-term financial decisions all come down to the compound interest you can generate on your wealth and assets. Einstein reportedly called it “the most powerful force in the universe”.
SmartAsset throws normal ‘mortgage calculators’ out the window, casting aside the claim that investment are mere percentage calculations. What about taxes, the increasing equity of the property, related expenses and closing costs? That all counts too, and SmartAsset will help you calculate the real world consequences of your decisions.
Features
SmartAsset, currently in beta, promises to bring us car, savings, and investment calculators. At the minute they’ve concentrated on rolling out what is frankly the most impressive mortgage calculator I’ve ever seen. Apparently, it all started out with an extremely complicated Excel spreadsheet when founder Michael Carvin became frustrated with the bad calculations provided by existing mortgage assistants.
Under the housing section there are several calculators such as ‘How much house can I afford?,’Buy-v-Rent’, mortgage comparison and a tax calculators along with a few others.
Basic mortgage calculator works out what you can afford
The main ‘How much house can I afford?’ takes into account your income, expenses and the typical housing market where you wish to live. Using these and their own database of financial information they estimate what housing bracket you can afford in the current market. It will also estimate how much of a down payment you will require.
Awesome buy or rent shows wealth well into the future
The Buy – v – Rent calculator is by far my favorite as it takes into account not only your financial situation but also weighs your prospective net worth in both situations (homeowner or tenant) at yearly intervals. The above graph displays the gulf between the two situations. The tools across the top enable you to customize house price and rent changes in your area and change figures such as current monthly rent.
Change variables for greater accuracy
The other calculators take on much the same look and feel. With every slight change you make you can feel the power of the calculator working in the background updating the results with tons changing information displayed in the sidebars and in the reports below.
Unfortunately, to get the full power out of SmartAsset you’ll have to be based in the US. While many of the mortgage and interest rates are similar to those in the EU and elsewhere, the automatic data is US only. You can still changes these rates and variables using the sliders across the top – it’ll just mean a bit more effort on your part.
The information that is displayed in the sidebars and as detailed reports below the main facts and figures really help in the decision making. They’re large reports customised to your situations based on the data you’ve supplied. They read really well and by using the information you’ve supplied, provide you with a list of assumptions the calculator is making about your situation and gives good advice about how to proceed. What’s more, they’re all written in plain, simple English with the no technical terms requiring an accountants explanation!
A snapshot of one of the many reports
Once all the calculations are completed you’ll be provided with an overall strategy with some surprising results. Given house price increases, tax incentives for certain areas and a whole load of other variables I found that a house $50,000 more expensive than an alternative can often work out much cheaper in the long-run.
Design
Right from the homepage SmartAsset dazzles with its good looks. In fact, while I was using I couldn’t help but think that it looked like an interactive infographic.
Most mortgage calculators are as a grim as an old sports sock; SmartAsset uses fantastic graphics and fonts which change size and colour instantly as you mess around with the different sliders and variables.
The reports are crisp and clean, while the graphs are colourful and sleek. All the buttons, input fields and menus are very well laid out and compliment each other really well. Logos and icons look sharp without an ounce of fuzz or pixelation.
Conclusion
I guess when it comes to money, the nagging question at the back of everyone’s mind is ‘What’s the catch?’ or ‘What’s their angle here?’. Well, SmartAsset is linked to loads of lenders to factor in their loan rates in their calculations. Their plans for monetisation is a referral fee for any user who applies for a loan based on their calculations. However, this doesn’t mean biased advice. Thankfully each referral fee will be the same for each bank so there’s no incentive for Smart Asset to give skewed results.
Trying to think of a better mortgage calculator (or a better looking one) is an impossible task. I definitely can’t wait for their upcoming calculations for other financial decisions even if they’re half of what the mortgage tool has to offer. For anyone considering attaching a massive mortgage sized anchor around their neck I definitely recommend SmartAsset to reduce the risk with sound information and advice.