If you are considering getting a home loan, it is essential that you do your research and fully understand what you are getting in order to find the best mortgages and interest rate for you and your family. For many types of home loans, you can research great mortgages ahead of time by using a mortgage calculator to figure out your major costs and expenses.
How to Use a Mortgage Calculator
When you are using a mortgage calculator, you need a couple of basic pieces of information: the mortgage amount, the mortgage term (usually 15 or 30 years, but could vary), and the interest rate. With these key pieces of information, you can get an estimate of what your monthly payment would be, and it will usually include your payoff date as well.
Other Things to Look For
There are some good things to look for in a mortgage calculator. One of the primary uses is to compare what different scenarios will do to your monthly payment. For example, you could change the term from 30 years to 20 years, or 15 years, or you can adjust the interest rate up and down to see what it will do to your payment. Some calculators even include options to add additional payments to your monthly mortgage such as additional monthly payments, one-time payments, bi-weekly mortgage payments, or even extra yearly payments. The benefits of this are that you can see how quicker your loan would be paid off. There are many types of mortgage calculators that you can use too. You can even find help with a buy to let mortgage calculator used in investment properties in the United Kingdom.
Check The Amortization Table
One of the best benefits of good mortgage calculators is the amortization table. This is the long table at the bottom of some calculators that shows you how each of your payments breaks down between principal and interest. It also usually sums up the total interest paid, which gives you a great look at the total cost of your loan over time. So, as you change your loan features up and down, take a look at the total interest paid, and see how it changes. You can see a big difference in loans and how much you pay especially as you lower the interest rate or shorten the loan term.
Mortgage calculators are a great tool to help you find great mortgages to help you meet your financial goals. They will help you see how changes characteristics of your loan such as the term, interest rate, and payment schedule have on your total cost. It is a great tool to help you see the total picture of your new home loan.
2 thoughts on “The Benefits Of Using A Mortgage Calculator”
Hank, if anything gets you motivated to pay extra on the mortgage, it’s the amortization table. 🙂 It really shows that the best extra money you prepay on your mortgage comes as early as possible (to get the full 30 or 15 years of interest savings).
I recently re-financed and got a fantastic rate of 3.875% for a 30year. I also decided that at that rate I could never really sell the house, as it would likely be cheaper to rent it in the future if I wanted to move…
I can definitely understand where you are coming from. My wife and I are thinking about becoming landlords for the first time this summer when we look for a new house and rent out our old one.