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Have you started to look into getting a home loan, or refinancing your current loan? Then, you might have come across a mortgage calculator. It is an online tool that helps you know how much home you can afford based on several inputs, including term, loan amount, interest rate, and payment.
However, it is not all. You can use a mortgage calculator Houston in other purposes too. Do you know what the uses are? Are you saying no? Not to worry. Here, we have listed down a few important ways you can use an online mortgage calculator-
- Plan to pay off your mortgage early
By the time a 30-year fixed-rate mortgage will be paid off, a mortgage borrower will have made total interest payments significantly larger than the original principal on the loan. You can use the “Extra payments” functionality of online mortgage calculators for this. It will help you to find out how you can shorten your term, as well as net big savings by paying extra cash toward your home loan’s principal each month, every year or even just one time. In order to calculate your savings, enter an imaginary amount into one of the payment categories (monthly, yearly or one-time) and then follow the instructions to see how much interest you will need to pay for the loan.
- Make a decision if an ARM is worth the risk
The lower initial interest rate of an adjustable-rate mortgage can be tempting. However, while an ARM may seem appropriate for some borrowers, others may find that the lower initial interest rate will not cut their monthly payments as much as they think. In order to have an idea of how much you will really save initially, enter the ARM interest rate into an online mortgage calculator, leaving the term as 30 years. After that compare those payments to the payments you get when you enter the rate for a conventional 30-year fixed mortgage. Doing so may confirm your initial hopes about the benefits of an ARM – or provide you with a reality check about whether the potential plusses of an ARM really overweight the risks or not.
- Know the time of getting rid of private mortgage insurance
By using an online mortgage calculator, you can determine when you will have 20 percent equity in your home. It is a magic number for requesting that a lender wave private mortgage insurance requirement. Just enter the original amount of your mortgage and the date you closed, and then follow the instructions. After the multiply your original mortgage amount by 0.8 and match the result to the closest number on the far-right column of the amortization table to find out when you will reach 20 percent equity.
These are some of the great uses of an online mortgage calculator along with using it for knowing how much home you can afford. So, go online and use an online calculator for various purposes. You will be amazed to see the result.