If you don’t already, at some point most of us will need a mortgage and getting trust worthy estimations for our mortgage is something we all will have to do sooner or later. This is where a mortgage calculator can help. So what is it exactly?
A mortgage calculator is designed to help you determine how much you could afford to borrow and how much your monthly payments may be for residential mortgages. There are many benefits to using a mortgage calculator, some of which include:
Preparing for the future
A mortgage calculator will give you insight into whether you are ready to take on a mortgage with your current annual income. By knowing this, one can plan ahead and adjust accordingly for the future as you have a better idea on how much money will be going in & out if you do go ahead with it.
Helping you pay off your mortgage early
In real terms, by the time a typical mortgage holder has paid the average 30 year fixed rate mortgage, they have paid more in interest payments than they have the actual loan itself. A mortgage calculator can help you shorten your term by paying extra money towards your mortgage netting big savings. This can be done every month, yearly or even just once.
Should I opt for an ARM mortgage?
The appeal of a lower initial interest rate on an adjustable rate mortgage (ARM) can be tempting. However, it only really suits certain borrowers. Many may find that the lower initial interest rate won’t cut their monthly payments as much as they think. To get an idea of how much you’ll really save, try entering the ARM interest rate into the mortgage calculator, leaving the term as 30 years. Then, compare those payments to the payments you get when you enter the rate for a standard 30-year fixed mortgage.
Get rid of private mortgage insurance
20% is the key figure for requesting that a lender wave the private mortgage insurance requirement. You can use the mortgage calculator to determine when you’ll have 20 percent equity in your home.
Now that you have a better understanding on the use of mortgage calculators, why don’t you try one and see if its of any use to you?
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