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A mortgage payment calculator gives the exact amount of the monthly mortgage payments. A bi weekly mortgage payment saves the homeowner a considerable amount and reduces the loan term.
Mortgage payment calculator / Calculate mortgage payment
Monthly mortgage payments are easy to calculate with a mortgage payment calculator. The calculator has some mandatory fields such as the principal loan balance, the interest rate, the loan term, the starting month and year. Some calculators contain optional entries like a monthly prepayment amount, an annual prepayment amount, or a one-time prepayment amount for a specific month.
The calculators can be used to generate a monthly or yearly amortization schedule. The schedule contains details of the monthly payments, including the details of the principal and the interest paid, along with the balance paid. The mortgage payment calculator is also useful to demonstrate the effects of prepaying the mortgage on an irregular or regular basis.
The mortgage payment primarily consists of the principal and interest payments. It may also include property taxes and insurance premiums placed in escrow which is to be disbursed later to the tax collector and the insurance company. Payment of the principal and the interest portion of the loan depend on various factors such as the loan amount, down payment, interest rate, and the term of the loan. A larger down payment reduces the loan payments (i.e. If the borrower puts down a down payment of 20%, private mortgage insurance can be avoided, but property tax and other required insurance has to be paid). A low interest rate and a longer loan term significantly reduce the monthly mortgage payments. A short-term loan means the loan can be paid off relatively quickly, but the monthly payments are higher.
Some mortgage payment calculators cover only the principal and the interest payments. The monthly payment may be higher to reflect included taxes and insurance. The original amount of the loan is paid off over the life of the loan, that is, the principal is amortized. Some calculators provide an amortization table that shows the balance outstanding on the mortgage at the end of the month (or year).
Bi weekly mortgage payment
Making a bi weekly mortgage payment translates to substantial savings for the homeowner. These payments can be made by the borrower, or the borrower can hire firms distribute the payments for them. If the lender accepts prepayments, making bi weekly payments should not be too difficult. Firms that allow bi-weekly mortgage payments would just set up an electronic transfer from the bank account that takes out one-half of the regular monthly payments every two weeks. This means that the annual payment is covered in 48 weeks. In the last four weeks of the year, two more one-half payments are taken out and the principal portion of the payment is prepaid. Thus the principal for the next year is reduced by an entire monthly payment. Over a period of time, this reduces the life of the loan and the interest due. Some lenders may not accept bi weekly payments, as it does not meet their minimum requirement. In such cases, make one additional monthly payment per year over lender expectations, instead of the bi-weekly payments. Since twenty-six one-half payments are the same as an additional monthly payment, the results are similar to a bi-weekly payment schedule.
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