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Calculating the Benefits of an Early Payoff
What are the benefits of using a mortgage calculating tool? To answer this question we have to answer and much more basic, ground-level question… what are the benefits of paying off your mortgage early?
If you simply pay the minimum on your home loan every month than you’re going to pay a LOT of extra money in interest rates by the time you pay off your loan. In other words- the longer it takes you to pay off your loan the more interest you will pay, and the more money (as a whole) you will pay to clear your debt. By contrast- the faster you pay off your mortgage the less interest rate you will pay and the less you will ultimately spend to own your property.
Some of the benefits related to the early payoff of your mortgage is the fact that any payments you make toward your principle with additional monthly payments will mean that the length of your loan as a whole will be reduced. For example, a thirty-year fixed-rate mortgage where one additional monthly payment per year is made can reduce the length the loan by seven years.
Another benefit of paying your mortgage off early is the fact that you will realize a reduction in interest. This is because additional payments reduce total paid interest on your debt over the loan's life. The monthly interest you pay is based upon your loan's principle balance. Just as with the reduction in the length of your loan, one extra mortgage payment yearly can result in much money being saved on interest.
Higher Amount Of Equity
More equity is another advantage of early mortgage payoff. When the monthly payments are increased, the goal of owning a home without debt can be reached that much more quickly. And the reduction of your mortgage's principle means increased equity. Increased equity can also result in another benefit, which is more money for your home should you sell it before you have paid your mortgage in full. More equity in a home can also mean a larger line of credit if extra cash is needed.
Strategies For Early Mortgage Payoff
Homeowners looking to pay their mortgages off early have a few options. First, they can add the principal to the amount they currently pay per month. Of course, this strategy assumes that the mortgage being paid has no prepayment penalties. The principal can be added as a one-time lump sum payment, or it can be added month-by-month by sending any bonuses right to your lender. This strategy will ensure that none of the payments need to be seen or missed.
Another strategy is to make bi-weekly payments on your mortgage. Making half a payment every two weeks will add up to 13 full payments per year instead of 12. This can amount to a significant reduction in the life of your mortgage loan. However, it's important to check with your lender to see whether they will charge a fee for switching to bi-weekly payments.
Refinancing to a shorter term mortgage may also be a way to pay your mortgage off early. By reducing a thirty year mortgage to fifteen years, the interest rate will be lower. While doing this will increase monthly payments, the monthly flow of cash will be offset by the lower rates.
But is a mortgage calculator early payoff tool right for everyone? In a word, yes. Because this calculator enables anyone to budget all of the variables that go into a mortage, it is useful whether you wish to refinance or purchase a new home.
Anyone who wants to spend as little as possible in the long run on their home loan will benefit from using a home mortgage calculator tool. You can find one at http://www.home-mortgage-calculator.com/ along with useful advice and articles to help you negotiate the process of getting a loan or refinancing an existing one.
What To Do With Your Saved Cash – Lower Your Interest and Increase the Value of Your Home
If you've recently refinanced your home or are using a home mortgage calculator and planning to do so then you may be the in enviable position of wondering how to spend the money you're saving every month. This is obviously quite a great situation to be in, but what's truly amazing about it is that if you play your cards right, you can really stretch the value. One great option is to remodel your home. If you do so wisely, then you can actually increase the value of your home. The result? You save money every month on your mortgage, you pay less interest over the lifetime of your loan and your home is worth even more.
There are typically two areas of the home that will give the best return on an investment: the kitchen and the master bathroom. Most homeowners want a large, open, modern kitchen. His and her sinks are a must for a luxurious master bathroom and a separate bath and shower are always a favorite. Another way to instantly increase the value of your home is by adding an additional bedroom or bathroom. These can be costlier additions to are often well worth it. By utilizing a mortgage interest rate calculator you can determine the best scenario financially.
Article Posted by Expert Author: 1 on 06/14/2013
Article Posted In: Mortgage 411
What Can Home Mortgage Calculator Extra Payments Do For Me?
If you’re like most people you probably just pay the bare minimum on your mortgage every month. After all, if you’re like most people money’s probably pretty tight right now and you’re not exactly in a rush to go out and stretch your budget even further than it’s already pulled so you can go and pay more money than you have to month after month. But the second you take a step back and survey your financial life from a broader perspective you’ll see just how much you have to gain from making extra payments every 30 days.
The benefit of making extra payments is pretty easy to understand. The more you pay every month the more goes to your principal. The more goes to your principal the less you pay in interest over the life of your loan.
Making extra payments and spending less on your loan can save you tens of thousands of dollars over the terms of the loan and using the right tool to determine your home mortgage calculator extra payments lets you take figure out just how much spending a little more every month will save you in the long run.
Another strategy during this timeframe where we are enjoying historically low interest rates is to look into a refinance of your existing mortgage. You might be able to shorten the length of your loan as well as get a lower interest rate, which in the long run will save you thousands of dollars. Check out our home loan calculator to determine if this strategy makes sense for you.
Understanding the Benefits of an Online Mortgage Calculator
What questions do YOU have about using an online mortgage calculator?
How about the first, most basic question of all- what does one of these home loan calculators actually do?
Well, a mortgage calculator is a special calculator designed to incorporate all of the factors as well as all of the formulas that go into the price of a mortgage (for the short term and long term).
Why Do I Need a Special Calculator?
This is another common question people ask about using a special calculator to work out their home loan- why do they need to use a SPECIAL calculator in the first place? Why can’t they work out their home loan using a normal, everyday, run-of-the-mill calculator?
There are a couple good answers to this question, but they all revolve around the fact that unlike a specialized calculator, a normal calculator isn’t designed to handle all of the intricacies of a home loan, and as such it’s much faster and easier to just work with an online mortgage calculator.
Besides simplifying calculations that at best can be tedious, and at worst can be confusing, such a tool helps you enter into negotiations with a lending institution have a good handle on what type of loan agreement terms you will be able to handle in your existing budget. If a bank cannot offer you something that you can afford, at least you will know it early on in the process.
The Myth of Mortgage Interest Rate Calculator Expertise
Do you know what tools you need to use to get the best possible terms on your mortgage? And even if you know what tools you need to use- do you know how to use them to figure out the best way to tackle your home loan? The tool you need is a mortgage interest calculator, and using one is easier than you believe.
Don’t I Need to Be an Expert to Use a Mortgage Interest Rate Calculator?
Not at all. Sure, some people understand the fundamentals of how home loans and interest rates work better than others, but at the end of the day anyone can understand these terms and how they impact mortgages.
Experts like to make home loan calculations and interest rates seem more complicated than they are so they can profit off your insecurity. By learning how interest works and how to use a mortgage interest rate calculator you can finally acquire favorable mortgage terms.
In fact, you might employ this type of strategy in assessing terms of debt, so that you can approach your budget from a multi-pronged approach. Any existing debt you are carrying should be assessed to see if you can lower your interest rates and save in the amount you are paying overall.
The Helpful Advice You Need When Acquiring a Mortgage
A little helpful advice never hurt anyone, especially when that advice makes it easier to navigate the often-tricky world of home loans. With the right advice you’ll end up with the mortgage you’ve always wanted- one that nets you a great property without tying up all your cash!
What Sort of Helpful Advice Should I Look Out For?
Deciding what sort of home mortgage to sign up for will leave you with tons of decisions to make, and a little expert advice can go a long way towards making sure you choose wisely.
Do you know whether you should repay your loan over the short or long term?
Do you know why choosing the lowest interest rate possible isn’t always the right move to make?
Do you know how inflation will impact the price of your loan?
These are just a few of the many questions a little helpful advice can answer for you!
Our website has lots of free pages and articles to help you identify and ask important questions, as well as get answers to these questions. We also provide a free home mortgage calculator so that you can determine what type of loan your budget will bear.
Home-Mortgage-Calculator.com Launches New Site
We are thrilled to announce that we have officially launched our new site, Home Mortgage Calculator! We are confident that it will become a truly valuable resource for anyone looking into either purchasing a new home, or even considering a refinance of their existing mortgage. You will find several pages built with the consumer in mind. Our goal is to educate and advise on how to calculate your mortgage costs, including taking into consideration interest rates, taxes, homeowners insurance and more. With historically low interest rates available to consumers, banks are opening their doors to qualified customers who wish to purchase a home or refinance their loan to take advantage of these ultra low rates. We also cover industry jargon so that you can feel confident as you deal with a lending institution, as well as be able to understand everything that goes into what your monthly mortgage repayment will look like after the fact. Let us be your trusted resource in navigating these exciting waters, enabling you to understand the process while accurately estimating your costs.
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