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. If this is among the things that are bothering you, then you may like to use mortgage calculator.
As a matter of fact, this is being used widely worldwide by many people for calculating the amount of mortgage expense monthly. Mortgage calculation present some issues to an average person but the calculators are primarily designed for doing this task and thus, you can do calculations of the mortgage insurance, extra payments, hazard insurance, taxes etc in just 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 types of insurance policies are necessary as it is taking into account 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. They are being paid by homeowners for a number of purposes such as the maintenance of shared objects similar to 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 amount of cash that’s paid to the lender which is oftentimes 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. 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.