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Use a Mortgage
Calculator to Understand the Mortgage Amortization Process
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Mortgage amortization is often a mystery to the consumer. After all,
they oftentimes watch as loan officers whip out their calculators and
spill out complicated numbers in record time.
But most consumers, unless they work in an industry related to the home
buying and mortgage lending process, do not understand how loans are
amortized. That’s okay—as a consumer it’s really not necessary for you
to fully understand the amortization process and how your monthly mortgage
payments are determined.
However, it is important, if you are seeking a home mortgage loan or
if you already hold one, to have a general understanding of mortgage
amortization and how to figure monthly payments.
In short, by having a general comprehension of mortgage amortization,
you will be a more informed mortgage consumer.
What Does It Do?
When a mortgage loan is amortized, the amortization schedule is what
will calculate the amount of your monthly mortgage payment. A normal,
or standard, mortgage amortization will allow for the monthly mortgage
payment to cover all interest accrued on the loan in the last thirty
days since your last payment as well as a portion to be applied to the
original principal balance of the home mortgage loan.
By following the mortgage amortization schedule, the borrower is paying
off the balance of the mortgage loan principal, a little bit each month,
and building equity into his home.
It is not necessary for the mortgage consumer to know the mathematical
formulas that are used in mortgage amortization in order to be able
to answer common mortgage questions.
What is important is that you have a general understanding of mortgage
amortization; that you understand the ways that you can control or alter
your mortgage amortization – allowing you to pay less for your home,
and that you know what questions can be answered using a mortgage amortization
schedule or a mortgage calculator.
By playing with a mortgage calculator, also sometimes called mortgage
amortization calculator or mortgage rate calculator, the mortgage amortization
process will start to become clearer to you.
A mortgage calculator takes vague mathematical formulas and concepts
and illustrates them in ways that are easier for the consumer to understand.
A mortgage amortization calculator will also show the mortgage holder
just how much money he or she can save over the life of the loan by
paying just a little bit extra on the principal of the loan. Whether
you make a large sump sum payment onto your mortgage principal, or add
a small amount to each monthly payment, by playing with a mortgage calculator
you will clearly see that it can save you tens or even hundreds of thousands
of dollars over the life of the mortgage. The reality is that if all
mortgage holders spent time with a mortgage calculator, every one would
find a way to pay a little extra on their home mortgage loan!
If you have never used a mortgage calculator, or it has been awhile
since you have, you might be surprised at all that you can learn. Go
to Google, or any internet search engine, and run a search for mortgage
calculator. You will find that many sites in the business of initiating
home mortgage loans have digital versions of mortgage calculators hosted
at their site free for your use.
About The Author:
Peter Dobler is a veteran in the IT business. His passion for experimenting
with new internet marketing strategies leads him to explore new niche
markets.
Read more about his experience with credit and mortgages; visit
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