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Understanding Mortgage Calculators By alyssa collins Homebuyers, especially first time buyers, will eagerly jump into the process without completing what is possibly the most important FIRST step in analyzing their specific financial situation, which is: Using a good online calculator in order to assess their financial situation.
A large percentage of those in the market for homes make it easy for the brokers to steer homebuyers into accepting deals that are more beneficial to the broker than YOU, the buyer – AND IT’S NO WONDER!
First time homebuyers who are unsure of how these loans actually work many times are easily confused and even overwhelmed with the process and terms. Points, principle, interest rates, interest only loans, ARM, FRM etc... can ALL be confusing.
Why not be prepared by using a good online calculator prior to actually sitting down and talking with a broker or bank?
There are many on the Internet and most are very easy to use. Knowing your personal financial situation, and learning some basic calculations can level the playing field and very possibly save you lots of money.
By learning how to use a basic calculator you can easily understand the basics of mortagage loans.
Online Calculator –The Basics
Monthly Payment - the most basic job of a good online calculator is calculating your month to month house payment.
Here's what you need to input: - The amount you want to borrow - The interest rate of the loan - The length of the loan - usually in years or months
You’ll simply enter these three numbers into the form and submit. The calculator will then process the three variables, principle, interest and length of loan and will return the amount you will pay monthly based on the criteria you entered.
For example: The amount you need to borrow, or principle is, $200,000 at 6% interest rate to be paid over 30 years – your monthly payment will be: $1,199.00 per month.
Analyze the Scenario
A good online calculator will not stop there...
Most programs also return a few other critical numbers, such as:
above the total amount paid – interest and principal - by the borrower at the end of 30 years will be $431,640.
Total Amount of Interest The Borrower Will Pay
In our case above the total amount of interest the borrower at the end of 30 years will be $231,640 about 53% of the total amount spent is on interest.
Many are amazed how this seemingly slight numeric change in interest rate can have such a major and powerful influence on the total amount paid over the life of the loan!
In the above situation, with a jump in interest rate to 7.5%, the total amount paid drastically increases – the total payment now is $503,280, with $303,280 going to interest only! The monthly payment would be around $1398.
Online Calculators – Summary
This example clearly illustrates how a 1.5% jump in interest rate can cost the buyer over 70 thousand dollars over the life of the loan!
Once you understand how interest rates drastically effect your monthly payment, striving for the lowest rate possible is a worthy goal. The online calculator arms you with critical knowledge prior to that initial meeting with loan officers or brokers.
For 15 years Leslie Collins has been helping all types of borrowers get the loan information they need to make the best home buying decision . Please visit the easy to use mortgage calculator before you talk to banks or loan officers.
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Does anyone know specifically when and where these regulations came into effect and where is the doc... VOE My husband recently quit his previous job (assumedly on good terms) to go work for the competition for better pay, perks, etc. We have to move because the new job is too far to drive daily. The loan officer is insisting on a VOE. Unfortunately the previous employer is quite ridiculous and vengeful and will now not sign the VOE form. Is there any way around this as we have provided paystubs and W2's showing he worked there for the past 2 years?? refi or pay more each month We currently owe 233,000 on our home at a rate of 5.5% and are 6 years into a 30 year mortgage. (Original loan was for 260,000) I've been paying an extra $200 each month towards principal to pay it off a bit sooner. Am I better off refinancing to a slightly lower rate (~4.5%) or should I simply continue to pay more each month on what we have? Who is entitled to the earnest money? My husband and I decided to buy our first home a couple months ago. After looking for a while we found one. Since we were pre-approved for a mortgage it was fairly easy getting the ball rolling. The sellers accepted our offer, (which included them paying for a termite inspection) and we set a closing date. In that time frame my husband lost his job and had to seek new employment. This changed our loan approval and the deal fell through. Now the seller is wanting the earnest money, money for the ... any investor friendly broker licensed in Geogrgia looking for cash out refi for 2 houses which are paid no mortgage...looking for cash out refi....
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[Email deleted as per forum rules. Thanks.] PMI - Conventional vs FHA We bought our house last September and as we were planning to put down 10% we learned we have to pay PMI. We told the Bank of America mortgage agent that we were planning to pay it off as soon as possible. We have been making double payments in hopes to get rid of our PMI. He told us that the best thing for us is the 30 year Fixed with PMI.
However, our mortgage is listed as 30 Years Conv w/PMI on our online account page and our HUD statement states that we have an FHA loan and we were charg... PMI with 20% down?? I have a credit score of 802 but last years income was lower than normal. I don't qualify for a traditional mortgage for the house that I want I'm about 40k short but my father is willing to cosign. I was told I can only get an FHA loan because he is a 'non occupant' and we are still required to pay pmi even though we are putting down 20%...Any way around this?? refinance We have 124,000 left on a 30 year mortgage. Currently 22 years left to pay. We pay biweekly (and pay 200 extra a month) the rate is 5.75. So it has dropped the amount dramatically through the years. Should we refinance at a 15 year, 3.8 interest rate or just keep paying the extra on the original loan. We would pay the same extra 200 on the new loan amount also. The closing costs might be around 3,000. Not sure yet. Am I just fooling myself into thinking lower rate will get it paid off qui... Should we refinance? Current: 27 yrs left on 30 yr fixed at 6.625% andamp; we pay $200/mo extra on a $773.18 Pandamp;I note. Home value $162K, owe $109,800. Ficos are 736/781. Offer: 30 yrs 5%, so not 2 points difference. We would be depleting large part of savings for closing. I say recoup that by lessening our non matched 401K deposits for 6 mo. We are disciplined and would go back to that for sure. Husband thinks not worth it. Plan on being in this home for life.
Thanks! owner or not Hi my ex wants me to sign the quitdeed under my legal name but I did on 2005 that this means im legally owner
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