Why You Should Use a Mortgage Calculator
March 10, 2025
A mortgage calculator helps you plan for future financial scenarios, such as buying new or refinancing a current home. A mortgage calculator allows borrowers to compare current mortgage terms with potential refinance options. Users can determine the potential savings and assess whether refinancing is worthwhile by inputting the new interest rate and loan term.
Creating Financial Strategy to Own Your Home
A mortgage calculator can help you determine how much and how often to pay. Making extra principal payments on a mortgage can accelerate the payoff of a mortgage and save thousands of dollars in interest. Knowing how to use your income to maximize your investment is good.
A mortgage calculator can show you the effects of making additional payments each month. Depending on your strategy, it’s an option you may consider along with other financial obligations. How much will you help yourself by planning your repayment efforts?
By inputting the extra payment amount into the calculator, users can see how much sooner they can pay off their mortgage and how much money that may leave them for other purposes.
Understanding Amortization and Equity Building
A mortgage calculator can provide insights into the home loan repayment schedule and equity building. Some calculators are designed to generate a repayment schedule illustrating how each monthly payment is allocated between principal and interest over the life of the loan.
This schedule provides valuable insights into how equity builds over time. And when you track the principal balance over time, you can estimate their equity in the home.
Comparing Different Mortgage Products
Mortgage calculators help you compare different mortgage products, such as fixed-rate mortgages, adjustable-rate mortgages (ARMs), and government-backed loans. ARMs offer lower initial interest rates.
But those rates will change over time. A mortgage calculator can help users compare the potential costs of ARMs with fixed-rate mortgages, allowing them to consider the risks of each option.
Government-backed loans, such as FHA, VA, and USDA loans, have specific costs associated with those loans. A mortgage calculator can help users estimate the costs associated with a specific type of government-guaranteed home loan.
FHA Loan Articles
April 30, 2025 In a previous post, we discussed why FHA borrowers should carefully consider whether paying for discount points truly serves their best interests, focusing on factors like short-term homeownership, opportunity cost, FHA mortgage insurance, and the prevailing interest rate environment. Discount points are an option for borrowers willing to pay a fee to lower the interest rate by a set amount. This is not right for all borrowers, and you don't want to pay for points you won't benefit from during the loan term.
April 29, 2025Are you considering buying a home with an FHA loan? You'll likely talk to your participating lender about FHA loan "discount points" – fees you pay upfront for a lower interest rate on your mortgage. The idea behind discount points is a straightforward exchange: you spend money today to reduce your interest rate. Typically, one point equals one percent of your total FHA loan. In return, your interest rate might decrease by an amount you and the lender agree upon.
April 28, 2025Home loans have various expenses that aren't apparent to a new borrower until much later in the process. What do you need to consider when making your home loan budget? It might not be complete without addressing some of the issues we cover here.
April 23, 2025 While the prospect of lower interest rates or more favorable loan terms can be enticing, there are situations where waiting is the better option. Refinancing without carefully considering your current financial circumstances is never a good idea, but careful planning in the current financial environment is even more important.
April 22, 2025First-time home buyers worry about loan approval, but there are important steps to take to increase the likelihood that the lender will approve their application for the loan or pre-approval. What do you need to know before you choose a lender?
