When you are about to buy a home, you would like to look for a mortgage lender to finance your home. But before you search various mortgage loan options, check your credit score, make an arrangement for the down payment, and ask for quotes from different lenders to compare and finalize one, you have to check how much home you can qualify for. And a mortgage loan calculator will help you with this.
It is a tool that gives you near-to-accurate results based on various inputs, including the loan amount, interest rate, number of years, type of loan, market value, and monthly income. But along with the query of how much home you can afford, a mortgage loan calculator Texas can help you to know other things too. Here are these –
- Pay your mortgage early
By the time one paid off a 30-year fixed-rate mortgage, he or she will have made total interest payments that are significantly larger than the original principal on the home loan program. Check and use the ‘Extra payments’ functionality of the online mortgage calculator. It will help you to find out how you can shorten your term, as well as net big savings by paying extra money toward the principal of your loan every month, each year or even only for a single time. And to calculate the savings, enter a hypothetical amount into one of the payment categories and then follow the instruction s accordingly. It will help you to see how much interest you will end up paying and your new payoff date.
- Check about ARM
The lower initial interest rate of an adjustable-rate mortgage or ARM can be enticing. However, while an ARM may be appropriate for some homebuyers, others may find that the lower interest rate will not cut their monthly payments as much as they think. To get an idea of how much you will save initially, try entering the ARM interest rate into the mortgage calculator and leave the term as 30 years. Then, compare those payments to the payments that you get when you enter the rate for a conventional 30-year fixed mortgage. Doing this may validate your preliminary hopes about the benefits of an ARM. Otherwise, it will give you a reality check about whether the potential plusses of an ARM outweigh the risks.
- The time to get rid of private mortgage insurance
You can also use this calculator to decide when you will have 20 percent equity in your home. It is a magic number for requesting that a lender wave private mortgage insurance requirement. Just enter the original amount of your mortgage and the date that you closed. Then, follow the instructions to multiply your original mortgage amount by 0.8. And then match the result to the closest number on the far-right column of the table. It will help you to find out when you will reach 20% equity.
So, what to wait for? Visit online, search as a mortgage calculator and use it according to your needs. The result will help you in various ways.
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.