Using a Mortgage Rate Calculator

2007-03-08 10:33:40

( Financial )



A mortgage rate calculator can be helpful in finding out the maximum amount of money you can use in buying a house. It also helps you decide what kind of loan you should apply for. A mortgage rate calculator can also make you discover how you can shorten your amortization schedule by prepaying more than the minimum amount due per month.

There are different kinds of mortgage rate calculators:

A loan rate calculator also called a fixed rate mortgage calculator can be used to calculate the repayments for different types of loans. It determines what your monthly payments will be, if you provide the loan term, the amount of your loan and its interest. The loan rate calculator also assists in estimating the amount of housing loan you can afford, determine the shortest possible payback time using different types of loans, provide the amount of interest you can afford, obtain different ways in payment for your loan situation, and provide interest rate comparison.

An adjustable rate mortgage calculator is used to find out how much you should pay monthly based on the loan term. In order to calculate your monthly payments, you need to enter the mortgage loan amount, the interest rate at the beginning of the loan, the term of the loan, the number of months before the first rate adjustment, number of months between adjustments, expected adjustment (entered as a percentage value) and the percentage of the interest rate cap.

In determining the amortization schedule, you’d need to provide the beginning monthly principal and interest payment, total monthly payments, total interest rate and the maximum monthly payment that you can afford.

When you are trying to find ways to pay up your mortgage loan, and have some extra money and could afford to it keep for a period of time in the bank (usually a minimum of a month), you can make use of the savings loan calculator to determine how much interest you can obtain from the money that you have in the bank. The interest earned can help in paying off your mortgage.

In determining the interest that you will earn, you will need to enter the amount of money you plan to keep in the bank, the interest rate, the period of time (in months) you intend to keep your savings in your account for and the monthly amount you intend to deposit.

The above are only a few examples of different calculators that can be used. Free calculators can be found on the World Wide Web or purchased in stores or online. If you decide to purchase a program, make sure that it has good reviews or someone has highly recommended it. A good calculator is one that will reflect the current interest rates in your area and currently updates it as the market rates change.


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