When a person wishes to purchase a home and wants a home loan to help finance this project, the first thing he must do is to decide on which kind of home loan will best suit his needs. In order to do this, an indispensable tool at his disposal is the mortgage calculator. There are different types of home loans, each with its own interest rates depending on the period of the loan. A mortgage calculator will help a borrower choose the right home loan for his needs.
The mortgage calculator is available at all websites of lending institutions dealing with home loans, real estate websites etc. Use this calculator, which is free, and enter a set of assumptions like loan amount and period of the loan. The following are some figures that are inputted into the mortgage calculator.
• Mortgage amount
• Loan period
• Interest rate
• Origination fees
• Closing costs
• Discount points
Apart from these assumptions, the mortgage calculator will also require details on whether the loan will be a fixed or adjustable one.
The more the information the mortgage calculator requires, the more accurate will be the information provided. Make sure that the figures you provide are accurate so that the comparison can be done properly. A mortgage calculator can be used to compare fees, cost and monthly payments of 2 types of mortgages. Using this comparison calculator, you can determine how much your liability will be over the years and decide which type of home loan to go with. Some people may feel that a comparison calculator is limited since it allows you to compare only 2 mortgages at a time.
However, a person can easily use a process of elimination in his choice. If there are say around 4 types of mortgages for him to choose from, he can first compare two, then choose the best and compare it to the third, choose the best from this and compare it to the fourth. By this process, he can arrive at the best home loan for his requirement. When you wish to compare between adjustable and fixed rate mortgages, you need to enter figures like margin, lifetime interest cap on ARM and index. If you do not know what any of these values are, seek the help of the lender or a mortgage broker.
In the same way that you can compare two mortgages, you can use the mortgage calculator to help you calculate rates between two or more lenders and choose one who has the best terms. While using a comparison calculator can help a borrower secure good lending rates, there are other ways that he can secure a good home loan. Apart from getting a home loan at low rates, he can also use many energy efficient products in his home to help him save money.
Many state governments give incentives and tax cuts to those who install green technology systems in their home like solar panels. First, get a professional to inspect and evaluate your home for its energy efficiency and suggest ways to improve. Areas where energy can be saved are by using better home insulation, replacing old water heaters, heating, and cooling systems. The government offers federal tax credits to those who use energy efficient products.
Some of these products that can be installed at home and given tax credits include solar water heaters, insulated roofs, heating and cooling systems. If you feel the cost of installing these energy efficient products is too high, you can try and make use of low home loan rates and get a home equity. When a line of credit loan or home equity is taken to install energy efficient products, the borrower will get loans at extremely attractive rates that could be tax deductible too.
The Energy Star helps consumers easily identify 'green' appliances that can help him save on fuel costs, heating and cooling bills. The number of stars indicates how efficient the system is. Other innovative green appliances include geothermal heat pumps and tank-less water heaters. A geothermal pump works from underground to heat or cool a house depending on the season. Adopting new home construction methods to improve energy efficiency like roof insulation will help a homeowner cut costs over the years. So, get a good home loan rate, combine it with green technology, and save big.