| About this calculator | |
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Hi,
The ultimate loan calculator was written to provide the most important information needed when planning to buy a new home - monthly net payment. Most other websites providing mortgage calculators either only offer simple calculators to only calculate principal and interest or they take only some of the cost into account. The ultimate loan calculator is as complete as possible and calculates the real monthly cost associated to home ownership. The most important figure in whole mortgage loan calculation is the net monthly payment. The net monthly mortgage payment represents the amount of money you must have available each and every month. The net payment is the total of all mandatory expenses subtracted by the amount that can be deducted from you income taxes. Mandatory expenses you usually cannot avoid when having your own home in addition to loan principal and interest payments are property tax, home insurance, HOA fees and private mortgage insurance. Of course it is always possible not to take an insurance for you new home, not very smart though, or to buy a home from a community without HOA fees. Also paying mortgage insurance can be avoided by having a down payment of more than 20% or in some cases by paying higher interest. Still it makes sense to be aware of these additional costs when wondering how much home you can really afford. Another very interesting data that the ultimate loan calculator shows is the effect of additional payments made to the loan principal during the course of the loan. This is information that lenders do not necessarily tell you unless you specifically ask about it. The main reason why they don't want you to know about it is that making these additional payments regularly, even small ones, will dramatically reduce the total interest paid for the loan. Lenders make money from the interest you pay not from the principal thus it is in their best interest to keep you in dark about paying more than what you have to. Unfortunately though too many people cannot make these additional payments because the initial loan payment is the most or, sadly enough, even too much that they can afford. Please do yourself a favor and don't be one of these people. You can always use the ultimate loan calculator to figure out what you can really afford. The third important observation you will make when using the ultimate loan calculator is that instead of paying your mortgage monthly paying half of your monthly mortgage payment biweekly will reduce the payback time and the total interest of the loan. Why does paying biweekly makes a difference? The reason is very simple, paying monthly you will make 12 payments per year but paying biweekly you'll end up making 13 payments a year. Just because there is 52 weeks in a year you'll end up making 26 half mortgage payments in a year which of course is same as making 13 full monthly payments a year. When taking out a loan you can ask your lender if it is possible to pay your loan biweekly instead of monthly. On the other hand you don't need to setup anything with you lender to achieve the same result. As you have already noticed paying biweekly is pretty much the same as paying one extra monthly payment a year. What you can do is to either make one extra monthly payment at the end of each year or pay 1/12th extra of you monthly payment each month. Nice thing about these extra payments is that they will be directly applied to your loan principal as the interest is already covered by your normal monthly payments. Now that you know how much you can really afford each month for your new home the next task is to find a home within your price range. You can use many online tools available or you can contact local real estate agency to help you find your dream home. When looking home inventories online or listing from your realtor don't forget to ask about additional costs like property taxes and HOA fees. Happy house hunting.
The Ultimate Loan Calculator uses following great tools: | |