Buying a home is one of the most cherished dreams of Americans. However, before you decide on which home to buy, you have to check several things. For finances, you need to look for a lender, who can approve your home loan application. On the other hand, you need to use a mortgage calculator to estimate the payment on a new mortgage.
But it can be used for other purposes too. Here are some of the most useful ways you can use a home loan calculator Texas. Take a look for better understanding –
Planning to pay off your mortgage early
By the time a 30-year fixed-rate mortgage is paid off, a general mortgage holder will have made the whole interest payments that are considerably larger than the original principal on the loan. You can use the extra payment functionality of an online mortgage calculator in order to find out how you can shorten your term. You can also find out how to save big by paying extra money toward the principal of your loan each month, every year or even just one time. In order to calculate your savings, you can enter an imaginary amount into one of the payment categories, such as monthly, yearly or one-time, and then click on the given option to see how much interest you will end up paying, as well as your new payoff date.
Fix on of an ARM is good for you or not
The lower interest rate of an adjustable-rate mortgage, or ARM, can be enticing. But while an ARM may be suitable for some borrowers, others may find that the lower initial interest rate will not cut their monthly payments as much as they think. To have an idea of how much you can save at the early stage, you should enter the ARM interest rate into the mortgage calculator, leaving the term as 30 years. Then, you can compare those payments to the payments you get while you enter the rate for a conservative 30-year fixed mortgage. Doing this may authenticate your preliminary hopes about the settlements of an ARM. It can also give you a reality check about whether the possible plusses of an ARM overshadow the risks or not.
Know when to get rid of private mortgage insurance
You can use this online tool to know when you will have 20% equity in your home. This percentage is the magical number for asking that a lender wields private mortgage insurance requirement. Just enter in the actual amount of your mortgage and the date you closed, and follow the instructions. Then, multiply your original mortgage amount by 0.8 and match the result to the closet number on the far-right column of the amortization table to know when you will reach 20 percent equity.
These are some of the easiest and efficient ways a mortgage calculator can help a homebuyer like you. To know more about this calculator, check online.
Author Bio: Joan Gallardo, a Senior Loan Officer, with 20+ years of experience, here writes on 2 questions to ask the best mortgage lender in Houston when you are about to choose one of the first time home buyer programs in Houston.