Equity Line of Credit Calculator—Your Decision-Making Tool

2007-03-08 10:33:40

( Financial )



When you are considering the pros and cons of getting an equity credit line from your lender, you will find an equity line of credit calculator very useful.

You’ll have to consider the important information that feed into the equity line of credit calculator data fields to enable its calculations. These data include (but may not be limited to):

• Principal amount you plan to borrow
• Market rates of interest
• The term of your loan (how long you plan to pay it back)
• Fees and other charges
o Loan processing fees
o Appraisal, credit report fees
o Title search, validation, update charges by the local property register
o Recording charges by local government
o Notary and legal fees
o Real estate tax and related charges

The equity line of credit calculator is especially helpful when you are comparing alternatives, like choosing between fixed-rate or adjustable-rate mortgage, for example, or whether to refinance your mortgage or not.

When weighing the options, you’ll probably be asking yourself questions like:

• How much will each option cost
• How much money will be saved
• Will the savings be large enough to justify the costs

You can even use the equity line of credit calculator to help you decide how much you will borrow. You probably have an amount in mind but as you work out the impact on your monthly income (that is, your capacity to pay) you will weigh possibilities whether to increase or decrease the amount of the loan.

You must take a good look at market rates of interest. Equity line of credit usually bears interest indexed to prime lending rate. If market rates are low or have been on a downtrend, you’ll probably prefer a fixed-rate loan so you lock in the low interest. If market rates are high and are expected to go down, you may want to examine equity line of credit more closely, with its adjustable rates.


All rights Reserved © Tradenet Services srl
Do not duplicate or redistribute in any form.