Calculating Your Early Repayment Options With A Mortgage Calculator
If you own your own home or are planning to buy a home, you should become very familiar with a great little tool called a mortgage calculator. A mortgage calculator is an online tool that tells you a lot of information about your mortgage. You can use a calculator to figure interest payments, house payments and much more. If you use the amortization option on a mortgage calculator, you can view each and every mortgage payment due. You can even see what affect making extra payments will have on your mortgage.
When you first start paying on your mortgage, the majority of your payment will be going toward interest. It is not until the end of your loan that you actually start really paying down the principle balance. A mortgage calculator will help you see exactly where your money will be going before you take out a loan. If you already have a mortgage, a mortgage calculator will show you how your payments will be distributed throughout repayment.
You can also use a mortgage calculator to see how making extra payments toward principle will affect your loan. For example: If you have an 8%, 30 year mortgage for $100,000, you will pay back $264,153. A huge chunk of that amount, $164,153, will go toward interest. Using a mortgage calculator, you can see how making an extra $50 payment each month toward principle will save you in the long run. By making an extra payment each month of $50, you will save $39,908 in interest. You will also pay off your mortgage 6.08 years earlier.
Why should a mortgage calculator be of interest to you? You can use the calculator to “try out” different repayment strategies. The mortgage calculator will show you how each strategy will pay off in the long run. A mortgage calculator can also be very helpful when it comes time to refinance your loan. It will show you exactly how much money you will save by refinancing at a lower rate.
You can also use a mortgage calculator to budget for a home. Many times, the loan that you qualify for is not the loan that you can afford. After you have completed a realistic budget, you can use a mortgage calculator to find the loan that you can afford. How much money can you reasonably borrow and pay back without having to make sacrifices? A mortgage calculator can help you figure it out.
When you have the right tools, you can make great decisions. Never buy a home or take out a mortgage without knowing all of the facts. A mortgage calculator will help you learn all of the details of your potential or existing loan.