A form or program which is used to determine the monthly repayments of a mortgage. A mortgage calculator requires three items in order to determine the monthly repayment: the loan amount, the interest rate charged and the term of the loan.
Using the mortgage calculator is very simple. Just subtract the down payment cash you have from the total cost of the house and then use this amount to determine the subsequent monthly repayments from the mortgage calculator form or program.
The popular term of a mortgage loan is 30 years. However, you can still check variations in monthly repayments by keying in different terms. The mortgage interest rate applicable always goes in line with the prevailing mortgage interest rates. This rate is determined by several factors including the type of loan, the term of the loan as well as the credit history. Check the mortgage rate today and use it to determine the total amount payable and the monthly repayments.
You should be very careful in entering figures because a wrong figure may give you very abnormal amounts. Depending on the time you use the mortgage calculator form or program, the values may change when you contact the mortgage lender who will use the prevailing rates.
Mortgage Calculators May Also Be Used to…
- To find out the right time to dispose of your private mortgage insurance. This is done by determining when 20% value of equity in your current home will be remaining. This is the figure required for you to request your lender to waive any requirements of private mortgage insurance. To arrive at this value, simply enter the original mortgage amount and the date taken before recalculating the amortization table. Multiply this amount by 0.8 and then match the result obtained to the number closest on the far right column in the amortization table. You will find out the time when you will arrive at 20% equity value of your home.
- To decide whether an adjustable rate mortgage (ARM) is worth taking the risk. The most important thing is to find out the amount of money you will need to save initially. Establish this by entering the interest rate to the mortgage calculator and allow a term of 30 years. Use the fixed mortgage rate and then compare the total amounts. Such a confirmation will enable you to know whether there are benefits you will reap from the ARM and the risks associated with it.
- To decide whether you need to pay off or refinance your mortgage before expiry of the term loan. Normally, when the term loan expires after about 30 years, the interest you will have paid will have exceeded the principal amount by far. Check from the extra payments section whether you could make any savings by paying off your loan earlier before expiry of the term. If there are any savings then you could refinance or pay it off from an external source.