Mortgage calculators are great resources for homebuyers and homeowners for a variety of reasons. They use information including sale price, loan terms, down payment, tax, insurance, and interest amounts to establish repayment requirements. It is definitely to your best advantage to use them before, during and after the home buying process as a tool to reach financial goals. Allowing you to play around with “projected” numbers in order to figure out how much your potential monthly payments will be based on a variety of home mortgage loan types, is only one benefit. You can also use a mortgage calculator to determine how early to pay off a home mortgage and the affects of making different additional payment amounts.
Early completion of the loan principle is extremely beneficial to homeowners as it will result in less cost over time. Amortization schedules are also a great tool that demonstrates how much any given home loan will cost over its lifetime at a particular interest rate. Many first time homeowners are shocked to discover that a 30 year fixed home mortgage loan for $200,000 at 5% will eventually cost them some where around $386,511.57 if it runs its course without any extra payments. By playing around with the mortgage calculator, you can also determine if a traditional 30 year or a 15 year mortgage would be more affordable in the long term. Furthermore mortgage calculators allow mortgage holders the ability to realistically weigh the risks of different kinds of loan products like ARMs.
Many homeowners find mortgage calculators useful even after the purchase of a loan because they can use them to determine when they will reach specific equity goals and targets. Knowing when you have built up enough equity in your home can you help you determine when to relinquish homeowners insurance or if you can use your equity for other purposes like investments or retirement.
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