Mortgage Calculators Are Fun And Informative
The many uses of a mortgage calculator
1.) Save time - Interested in buying a house? Don’t want to waste your time talking to a banker or a real estate agent without knowing if the payments will be close even close to what you can afford? Just go to a mortgage calculator and enter a hypothetical purchase price and an average interest rate for your area, select your loan terms (i.e., 30 year, 15 year, etc.) and let the calculator do the work for you. This will give you a rough starting-off point to decide if you can afford the house of your dreams at the present.
2.) Same money – We all know that making extra principal payments on our existing mortgages can save us a lot of money in interest paid over the life of the mortgage. But do you know exactly how much it can save you? You would know that if you had a mortgage calculator to play around with. Psychologically, we are much more likely to pay extra if we can see how doing so impacts the big picture. Seeing how many thousands of dollars in interest you can save and how many years you can shave off the life of your loan will make you more motivated to cut back on wasteful spending and put those funds towards extra principal payments.
3.) See into the future – Let’s face it. Mortgages are complicated and tricky to figure out. You start off paying mostly interest and little on the principal, and then over time that scenario flip-flops and you have the interest nearly paid off. Mortgage calculators allow you to see an amortization table. You can glean much interesting and useful information from this table, including how much principal you have left to pay on your mortgage, how close you are to being able to rid yourself of that annoying and pesky PMI (private mortgage insurance – required if you owe more than 80% of the home’s value), and how smart it is to put extra money into home remodeling (do you have enough equity in the house to justify the expense).
See… mortgage calculators CAN be fun to use, and useful and informative, too. What other ways have you used an online mortgage calculator to your benefit?
5 comments:
I like to look at mortgage calculators and see kind of how my future budget might look like. I'm weird.
I honestly think people drastically underestimate the cost of owning a home and/or rentals.
Yes the calculators are a great start, but I am almost never okay with living in a home "as is," and rehabs are expensive. I recently completed one where I did 95% of all of the work and I spend about $20k (after applying some pretty crazy money saving tactics). Really think about it though, I spent $20,000 on a rehab. E-gads.
I use it to show clients how much they'd save if they got a 15-year loan instead of a 30.
Ridiculous amount of interest saved!!
Now that's the kind of fun I'm talking about. lol. :)
I've also used it to see how much my payment would be if the interest rates were back at 8%.
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