Whenever you are thinking of buying a home or getting a refinance loan or may be simply a second mortgage, it is important for you to get your affordability status. A mortgage calculator is a financial tool that helps you to find the costs of getting a mortgage and the total costs of buying a home. It also helps you to compare amongst different home loan offers and the savings that you can make through mortgage refinancing.
Using the mortgage calculators
If you use the mortgage calculators you will come to know about the:
Affordability – If you use a mortgage calculator you will be able to find out your affordability. Thus it will help you to decide as to which home you can afford to buy.
Costs of buying a home – With the help of a mortgage calculator you will be able to find out the total costs of buying home. Thus, you will easily be able to decide as to which home you should buy.
Amortization process – A mortgage calculator also helps you to calculate the payment amounts and thus helps you in understanding the amortization process. If you use this calculator, you will come to know how your payments are divided into two parts. One part goes towards the principal amount borrowed and the other part goes towards the interest. You will also be able to understand how the payments reduce the loan term.
Difference between buying and renting – You will also get a mortgage calculator to get the difference between buying and renting a home. Thus, you will be able to decide if buoying will be better for you or will it be renting that will be more affordable for you.
Better offers – With the help of a mortgage calculator as you are able to get the details of the payments against a mortgage, you will be able to compare amongst different home loan offers and get the right mortgage as per your affordability.
Home loan refinancing – If you use a mortgage calculator you will be able to find out if home loan refinancing is going to help you in any way to save your home. That is, you will come to know if you will be able to afford the home loan payments even after getting a refinance home loan.
Thus, you can see that a mortgage calculator can help you to take the right decision as to what kind of home loan will be the best for you.
Mortgage Guide: Locating That Perfect Mortgage
Seems like offers for mortgages are plastered everywhere today. Anyone who is interested in buying a home will have no problem finding a load of options available to them. There are mortgage lending services everywhere. Some claim to have the lowest rates, while others boast of 'best terms' or 'best financing'. So a lot of interested people end up getting lured in by the advertising. This is not a good thing. Don't be swayed by the ads, you need to already know exactly what it is you're looking for.
There are a few different aspects of mortgage hunting that you need to keep in mind. You always need to put in the time carefully considering all the things involved, because they all play a part in determining what you are going to end up paying overall for your home.
The interest rates can be called the most important part of the equation for home loans. This will be the charge, or the cost, for doing business with a financial lender. This figure will vary a bit from lender to lender. The important thing to consider is what the difference is from one lender to another. Even if you can cut down the rate very slightly, over time it can add up to saving you thousands.
Loan terms are another crucial feature that needs close scrutiny. The longer your loan turns out to be, the more interest you are going to be charged, and the more it's going to cost you. Most people only focus on the monthly payment amount, and choose to think about the long term later. A longer loan brings lower monthly payments. But choose your terms wisely, and take a look down the road into your future a little before deciding on what you sign your name to. You want to be able to handle your payments, and pay your loan off as quickly as you can.
Good customer service and plenty of experience are other important factors too. When you bank online, you need to be sure your lender has these things to offer you too. Whenever you call them to get a free quote, you should get some idea about their customer service, and a feel for how experienced they seem to be. If you get a shoddy performance now, most usually that's what you would get down the road. So it would be wise to simply move on.
Any home loan you decide on should include the things mentioned above. Get your best interest rate for a lower cost for the home. Gather as much information as you can, learn the lingo and terms used to discuss mortgages, and do your research. Take advantage of free quotes and all the tools available, like loan calculators. They can be a great help for figuring up what your costs are going to be. There are loads of lenders ready to compete for your business, so compare and negotiate, and you should have no trouble nailing down a good mortgage for your home.
Mortgage Guide: Every Mortgage Holder Should Understand PMI
We seem to need insurance for everything today. From our lives to the house, from the car to our health, and even on our mortgage. PMI, or 'private mortgage insurance', is a term used for describing the type of insurance that will protect a lender against a mortgage loan default. It usually comes into play whenever there is a down payment that is less than 20 percent of the overall price of the home.
Your monthly premiums that you are required to make are based on the amount of your down payment and the overall total of the loan. Usually the payment is about 1/2 of 1 percent against your total loan value. The payments get added to the mortgage so it's easier to stay paid up and kept track of.
One good point about the PMI is this, if you happen to be someone that was required to take it, you don't have to worry about carrying it for the whole term of your loan. Once you get to the point of paying the loan amount down by 20%, the lenders automatically will discontinue your PMI premiums. This is a law requirement, that they MUST stop those payments once the balance of your loan gets to 78% of the original amount. This typically makes a difference of about $37 to $50 in your monthly payment.
The best scenario you can have is not to need to pay the PMI period. There are a few ways of avoiding this. One is to take a higher rate of interest, which usually ranges from .75 to a whole point. Another is by applying two mortgages to the home, having one cover 90% of your total purchase price while the other covers the 10% that's left. Both options will require that your go over your numbers carefully to clearly see whether or not they will provide you with financial benefit for the whole term of your loan. One full percentage point of increased interest will add up to be a massive load in additional interest charges throughout the term of your loan, and could well exceed anything you might have paid via PMI insurance.
You need to know also that if your loan happens to get classified as 'high risk', now the lenders are required also by law to keep the PMI intact until you have 50 percent of your equity built up. Usually these loans are given to people who had loans and didn't produce the adequate income documentation, and also had a shaky credit history. It's best to talk person to person when dealing with mortgage providers about how much time you have to keep carrying the PMI.
If you seriously want to end up ahead of the game, then it's best just to be ready with 20% to put down and have a decent credit report. Achieving both of these can sometimes take some years, but they can deliver some great benefits when it comes to purchasing your home. It’s well worth making the effort and doing it the best way for having the least pain for the term of your loan.