In general, homebuyers use a home mortgage calculator to estimate how much they have to pay for a new home. Apart from that, you’ll be surprised that it has many other uses.
Here are three other ways to use a home mortgage calculator in Utah:
When Planning to Wipe Out Your Mortgage
If you have a fixed-rate mortgage payable in 30 years, by the time you complete your payments, your total payments for interest alone would be bigger the principal.
By using a home mortgage calculator, you can find possible ways to cut your term and make significant savings by paying more each month than necessary.
Determine if the ARM Is Commensurate to the Risk
An adjustable-rate mortgage (ARM) may be enticing because of the low initial interest rate it offers. For some, an ARM may be beneficial, but for others, it may not lower the monthly payments significantly.
To find out if you will enjoy savings at the start, enter the ARM’s rate into the home mortgage calculator. Leave the term at 30 years. Do the same for a traditional 30-year fixed mortgage loan. Compare the payments you compute for both. This way, you can determine if the benefits that you will gain from an ARM is worth the risk.
Determine the Right Time to Do Away with Private Mortgage Insurance
You can make good use of a home mortgage calculator to find out when you will reach 20% home equity. This is the threshold that needs to go over. It will allow you to request your lender to waive the need for private mortgage insurance.
Input the original mortgage amount and the date of closing. Click “Recalculate Amortization Table.” Next, multiply the original amount of the mortgage by 0.8. Match the resulting figure to the closest number you can find on the amortization table’s far-right column. That is when you will get to 20% equity.
Other than estimating your payments for a new mortgage loan, there are other uses for a home mortgage calculator. You can use it to plan for an early mortgage wipeout. You can use it to weigh if an ARM is worth the risk. You can also use it to find out when you can request for the waiving of the private mortgage insurance.