Understanding An Online Loan Amortization Schedule
The biggest factor in how much a house will cost is how long your mortgage is. Too many people, however, only look at what they pay each month. What they should do instead is use an online loan amortization schedule, so that they can find out what their house really costs.
Comparing 30-Year Loans:
The best mortgages are 15 year fixed rates, unless you intend or need to move very often. At the start of these mortgages, most of what you pay goes towards paying the interest. However, after a number of years, your interest and principal will have evened out. Many people take out a 30 year mortgage, because it means they have longer to pay it back. However, if you took out a $200,000 mortgage over 30 years at a 4% interest, you will pay back a total of $343,739.
What an online loan amortization schedule will show you very rapidly is how much less you would pay should you have a 15 year mortgage instead. Taking that same example, you would pay more every month. However, in total, you would pay back not $343,739, but rather $266,287. That is a huge savings! Of course, it does mean that you have to pay a little bit more every month, and this is something that people often find very difficult. This is why it is so important to look at the bigger picture.
A loan is about more than the interest and the principal. There are insurance fees, county taxes, property taxes, and more. The higher the cost of your house, the more these other expenses will be as well. You can, however, add these charges to your monthly mortgage. Similarly, if you had a down payment of 20% or less, you will have to take out private mortgage insurance to protect the bank, which usually is around 1% of your mortgage. If you take out the 15 year mortgage, however, you will own less than 80% of your property much more quickly, at which point the insurance fees can be removed.
Other costs to be aware of include your utilities and your repairs. You may also have to pay monthly fees to your homeowners association, if there is one in your area. These are all expenses that you have to take into consideration. Then, there is the fact that you are likely to have to decorate, and you will have to make the occasional home improvement. These may seem like small costs, but they are actually quite significant. And, again, the larger your house is, the higher those costs will be as well. Of particular importance is that you take these things into consideration before you decide to purchase a house. Through an online loan amortization schedule, what you can do is get a clearer picture of what a house you are interested in will truly cost you over set periods of time. Use that to your advantage, so that you end up with more money in your pocket at the end of the day.
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