The numbers determined by a mortgage calc should be considered estimates and should be used as a tool in preparation for obtaining a loan, not as a primary resource for the repayment of your loan. Lenders will provide information on the amortization of your loan. Small discrepancies between the information given by a mortgage calc and that given by a lender can often be attributed to the differences in how fractions of a penny are processed by both parties.
Research and planning can help you find the mortgage that really suits you. Apply online to contact lenders about your mortgage or use our mortgage calc to find out more about your mortgage terms.
Apply Here – Check out our short form – free quote request
Using a mortgage calc can also help you ensure that your loan terms will not cause negative amortization. Amortization is the schedule of repayment of your mortgage through monthly payments of principal and interest . Negative amortization occurs when the monthly payments set by the lender are not high enough to cover interest and principal. This causes the outstanding balance of the mortgage to increase instead of decrease as the repayment period goes on. Negative amortization can cause a homeowner to default on the loan, and though uncommon, all borrowers should be certain that set monthly payments are high enough to cover both the interest and principal of the loan.
Primarily, a mortgage calc gives you your expected monthly payment, but it also shows you how a slight change can affect the repayment of your loan. A loan of $150,000 with a term of 30 years and an interest rate of 7% will have a monthly payment of $997. The calculator may also tell you that the total interest on such a loan would be $209,263. However, if you change the interest rate to 8%, the monthly payment increases to $1,100 and the interest increases to $246,232. This would mean that 1% made a difference of $103 every month for thirty years and a total of nearly $37,000 in payment of interest. Small changes in loan terms can add up, which is an especially important consideration for anyone looking in to refinancing.
Whether you want a loan to buy a new home or to refinance your current mortgage, a mortgage calc can help you decide what kind of loan is worthwhile and what cost you too much in the end. A mortgage calc can show you the difference a shorter term, a slightly lower rate, or an occasional extra payment can make on your loan and your finances. Use our mortgage calc to find out more or fill out our free short form to contact up to four lenders about finding a new mortgage or refinancing your existing loan.