Calculators – My Most Valuable Advice

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Is a Mortgage Calculator Really that Helpful?

Not everyone has the means to pay for a new house in full and if you can’t do so, applying for a mortgage is a smart move actually. On the other hand, it isn’t that easy to figure out how much cash you can borrow without having to worry whether you can pay the monthly premiums or not. You may want to use a mortgage calculator if this is among the things that concern you.

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.

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 types of insurance policies are necessary as it is taking into account the borrower and lender of finances. The reason why it’s imperative is that, it is ensuring that both the borrower and the lender of money are well 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. 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. 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. 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. In reality, this is one of the contributing factors whether to pursue on borrowing the money or not.

Basically, it’s up to the borrower how frequent to pay the interest which additionally determines how fast you can be free on your debts. 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.

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