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. The thing is, being able to find out how much money you could borrow is easier said than done, plus the fact that you have to factor in the monthly payments you have to meet. 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. As mortgage calculation might present some issues to average individual, calculators that are designed primarily for this specific task will do the work on their behalf from mortgage insurance, extra payments, hazard insurance, taxes etc. all in 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. 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. The Homeowners Association or HOA fees are another feature being calculated when using a mortgage calculator. 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.
In addition to the extra fees as well as insurance, among the major expenses with mortgage is the EIR or Effective Interest Rate. This is the amount of cash that’s paid to the lender which is oftentimes a bank for the purpose of lending you cash. In reality, this is one of the contributing factors whether to pursue on borrowing the money or not.
In the end, it is still the borrower who will set the frequency of his or her payment. 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.