Is a Mortgage Calculator Really that Helpful?
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.
This tool is used widely across the globe to help people to calculate the amount of their mortgage expenses every 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.
When someone has used the calculator, it is imperative to have good understanding of the terms that they might encounter when calculating the amount of the mortgage. The 2 kinds of insurance are extremely important because it takes into consideration the borrower and lender of finances. They are imperative as it ensures that both the borrower and lender of the money are protected from unwanted circumstances.
The PMI is meant to benefit the money lender while the homeowners insurance serves as protection to the borrower if in the object in question has minor or major damage. On the other hand, the PMI should be paid only when the load balance drops below 78 percent and the payment is no longer needed after that. Yet another less known feature of mortgage calculator but extremely useful is calculating the Homeowners Association or HOA fees. They’re paid by the homeowners for different purposes similar to maintaining shared objects like the hallways, elevators and so on. The amount of this fee will vary from one building to the other and even higher from neighborhoods.
Aside from the extra fees and the insurance, the EIR or Effective Interest Rate is another major expenses calculated in mortgage. This is the cash paid to the lender that is typically a bank for the purpose of lending you cash. 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. You may opt to pay it weekly, bi-weekly or every two weeks, semi monthly or monthly, depending on your choice but of course, the more often you pay, the higher the interest you can save and the faster you can finish on your mortgage.Continue reading