If you’re thinking of taking on a mortgage for a new home, you might be wondering what you’ll pay each month. There are plenty of mortgage calculators out there to help you achieve this goal.
Websites such as Zillow, Bank of America, and Bankrate have useful calculators. This knowledge will help you get a clear picture so that you can effectively plan your budget.
Bankrate.com shares three tips for effectively using a mortgage calculator.
1. A mortgage calculator can help you figure out a timeline for paying off your mortgage early.
2. A mortgage calculator can also assist you with deciding if an adjustable rate mortgage (ARM) is right for you. The calculator tool can be used to compare the rates of an ARM with a fixed-rate mortgage. However, adjustable rate mortgages can be risky, so proceed with caution.
3. Finally, the mortgage calculator tool can help you discover when you’ll be able to stop paying private mortgage insurance (PMI). The purpose of mortgage insurance is to protect a lender in the event a borrower does not pay their mortgage. Generally, borrowers must take on PMI if the are putting down less than 20% for their down payment on a home.