Benefits of Using a Mortgage Calculator
Only few individuals have the funds to pay a house in full and most can’t; if you are among the latter then you know that getting a mortgage is an ideal alternative. It isn’t easy on the other hand to find out how much cash you’re allowed to borrow without worrying whether you could pay for the monthly premiums or not. Say for example that this is one of the many things that bother you, then you should consider using a mortgage calculator.
The truth is, there are many people globally who are taking advantage of this calculation tool to know how much mortgage they have to settle month after month. As for the uninitiated, trying to calculate the mortgage can be enough to give them stress but with the help of calculators, it is possible to know how much that has to be dealt with in the mortgage insurance, extra payments, hazard insurance, taxes etc. in one place.
If ever someone has used the calculator, then it becomes important for them to know the terms that they may encounter as they calculate mortgage’s amount. The 2 kinds of insurance are extremely important because it takes into consideration the borrower and lender of finances. You may be wondering why this is crucial; well it’s because of the fact that it protects the borrower and lender of finances from unforeseen situations.
While PMI benefits lenders of money, homeowners insurance protects the borrower if there’s either major or minor damage to the object in question. PMI on the other hand has to be paid until the balance drops to 78 percent or less and then after, the payment is no longer needed. Yet another less known feature of mortgage calculator but extremely useful is calculating the Homeowners Association or HOA fees. This is paid by homeowners for various purposes like for instance, ensuring that shared objects such as hallways, elevators and so on are maintained well. There is no fixed fee for this amount but expect this to be higher than usual if you’re in a neighborhood.
Aside from the extra fees and the insurance, the EIR or Effective Interest Rate is another major expenses calculated in mortgage. As a matter of fact, this is the sum of money that you owe to the lender for them allowing you to lend the money. This is going to vary from place to place and also, an element used to decide whether to borrow the money or not.
But still, it is up to the borrower on how often they will pay the interest which determines how fast you could be free from your debt. Here is a simple logic, the more frequent you pay, the faster you can finish your mortgage; but to give you options, you may go for weekly, bi-weekly or every two weeks, semi monthly or monthly payments.