Buying a home is a great feeling for a person. But before you buy a house, you would like to know how much house you can afford for yourself. Being an automated tool, a mortgage calculator can help you to know this. And so, most homebuyers want to use it before searching for a home or looking for a mortgage lender.
You will be happy to know that along with estimating how much home you can afford, there are diverse other purposes for which you can use a home loan calculator Texas. Do you know what these are or, how they can help you in the long run? To answer your questions, here, we have put together some of the alternative uses of a home loan calculator.
- Planning to pay off your mortgage early
By the time a 30-year fixed-rate mortgage is paid off, the typical mortgage holder will have made total insurance payments that are larger than the original principal on the loan. You can use the “Extra payments” functionality of a customized calculator to find out how you can shorten your term. You can also boost your net big savings by paying extra money toward the principal of your loan each month, every year or even just one time. In order to calculate the savings, enter a hypothetical amount into one of the payment categories, including monthly, yearly or one-time. And then, check how much interest you will end up paying, as well as your new payoff date.
- Fix on if an ARM is worth the risk
The lower initial interest rate of an adjustable-rate mortgage, or ARM, can be enticing. However, when an ARM may be appropriate for some borrowers, others are in the opinion that the lower interest rate will not cut their monthly payments as much as they think. In order to get an idea of how much you can save initially, enter the ARM interest rate into the mortgage calculator, leaving the term as 30 years. After that, compare those payments to the payments you get when you enter the rate for a traditional 30-year fixed mortgage. Doing so may confirm your primary hopes about the advantages of an ARM or provide you a reality check about the potential plusses of an ARM that really outweigh the risks.
- Check when to get rid of private mortgage insurance
You can use the mortgage calculator in order to determine when you will have 20 percent equity in your home. It is the magic number for requesting that a lender waves private mortgage insurance needs. Just enter the original amount of your mortgage and the date that you closed, then click on the table and multiply your original mortgage amount by 0.8 and match the result to the closest number on the far-right column of the authorization table to find out when you will reach 20 percent equity.
As you are now familiar with different other uses of a home calculator, use it for your benefits and see the result.
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.