There are a lot of factors that go into calculating a loan. You need to take into consideration the type of loan, the term of the loan, interest rates, your income, your debts, and many, many other factors. Trying to do these calculations by hand can be difficult and can making errors in your calculations is all-too-easy.
Instead, consider using an online mortgage rate calculator. Top mortgage lenders provide these handy tools to allow their customers and potential customers to explore different options in mortgages when comparing terms, rates, and down payment options as they relate to the monthly payment.
While it is obvious that an online mortgage rate calculator will be essential when you are buying a home, there are two other important times when these calculators will be instrumental in providing data to make a decision.
Determining Private Mortgage Insurance Termination
Unless a buyer has a 20 % down payment on the home, there will be a requirement for Private Mortgage Insurance or PMI on the loan. The PMI will remain in place until the homeowner has 20% equity. As interest is a significant part of initial loan payments, this can take much longer than buyers initially assume.
By doing the math, you can determine just when you can drop PMI, how much you will spend over the time you require PMI and also how your options change if you can add more to the down payment.
Savings For Early Mortgage Pay Off
Another feature of the online mortgage rate calculator is to see how adding a small additional monthly sum or additional payments in lump sums throughout the year of annually can drop your total interest paid.
This is often a big incentive for homeowners to restructure the budget and save thousands of dollars in interest by paying off the 30 years or even the 15 years fixed mortgage as early as possible.
To use the handy online mortgage rate calculator offered by Guaranteed Rate, just visit us online. We offer several helpful calculators at www.guaranteedrate.com.
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