What you should Know about using a College Loan Calculator

Paying for your education will be a little too tough to handle, especially if you have enrolled in a good school. With this said, you may look into the process of taking up a college loan in order to ensure that you will be able to set the issue of meeting your college dues for a while. There are a lot of tools that you may use in order to ensure that you will be picking the right college loan for your needs and for your financial capacity, like a college loan calculator for example. Here are some basic tools that you have to keep in mind as you go about in using this kind of tool.

For one, you have to understand that the college loan calculator will not give you the best advice if you let it work by itself. This means that you have to take the time to tweak its settings and to input the necessary information that you have gathered about your college loan options. See to it that you use reliable sources when it comes to researching about the various options that you have as well. This way, you will be able to ensure that you get the most accurate information when you use your calculator.

Most of the interest calculators that you will find online will most likely be sponsored by loaning entities and, for some cases, the schools themselves. If you are not really in a hurry to find a college loan, then it will do you well to take time in finding a calculator that is sponsored by an impartial body. This way, you will be able to see to it that you will get your hands on unbiased and objective information as well. There are a lot of options online, so you should not worry about finding a calculator that will suit your needs best.

Finally, make sure that you use the right type of college loan calculator when you go about in computing your college payment scheme. Find a good interest calculator for you to find out how much money you would need in order to cover your future loan’s interest. Find a savings calculator as well, if you are interested in finding ways through which you can save a certain amount of money for yourself. Do not be wary of using as many calculators as you would need, so as to ensure that you will be able to make the best possible decision in choosing a college loan.

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How to Use an Interest Rate Calculator

The interest rate calculator is an interesting and helpful feature of many Websites today. It is particularly installed as a free and useable application of online mortgage and other loan sites. A potential borrower is now spared from the rudiments and stress of having to compute interest rate payments of particular loan products. But what is it actually and how useful could it get?

This type of calculator has become a popular and regular fixture of different Websites owned and operated by lenders. It is programmed to determine how much payment a borrower would shoulder as amortization to a loan given the current interest rates imposed and the intended principal. The borrower is offered the convenience of not having to take out the traditional physical calculator to compute the mathematical product of the principal, interest, and term.

The formula could be simple. However, there are several virtual calculators that are able to compute more complicated queries involving more factors. The nature of the Website owner could be an indication of the type of mathematical formula used. So how does one use the tool?

To use an interest rate calculator, simply fill up the blank fields provided in the page. Put the interest rate applied to the loan and the intended principal or loan amount. Click ‘compute’ or ‘calculate.’ In an instant, designated blank fields would bear numerical data. Those would pertain to the total loan amount and the total interest payment covering the entire loan maturity or duration. To put different interest and principal figures, simply click ‘reset.’

The calculator is usually posted in Websites of mortgage and auto lenders. Most banks’ online sites also feature the tool. Some other Websites opt to install the applications especially if their content is about loans and financial analyses. What’s more? Such calculators are readily useful 24-7 and are available for free.

A borrower who wants to determine how much his monthly amortization or payment to a loan could find the interest rate calculator a very useful and reliable tool. He could put different amounts of principal to make actual and accurate comparison. This way, anyone could instantly and easily find out just how much he should borrow from a loan provider for him not to compromise his monthly income and expenses. Interest rates could also be subject to change. Some calculators instantly apply interest rates while others require the user to provide such information.

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Mortgage Lenders Want You To Get ARM Rates

An ARM rate is an adjustable rate mortgage which means the interest rate changes once per year after the fixed period. Mortgage lenders are pushing ARM rates because they know interest rates are going to go up over the next 30 years of your mortgage.

Adjustable rates are seen as “3 year arm” and “5 year arm” which stands for the amount of years the initial rate will be fixed for. After the fixed portion it changes once per year up or down with the current rates. So if your interest rate goes up in 3 years your mortgage payment each month with be higher and not one dime of it will be going toward principal.

If a mortgage lender talks you into an ARM rate they’ll make a lot more money on that mortgage than if they got you into a fixed rate mortgage. They make it look attractive because the interest rate is lower to start with. That gives you a smaller payment per month or slightly more home to afford but it’s not a good idea.

Current inerest rates are lower than they’ve ever been at this point in 2011 with almost no chance of moving any lower. If you get an 3.50% rate that can adjust it can’t go down as much as it can go up before the banks and mortgage lenders aren’t making any money at all.

Have you used a mortgage calculator to see if you’ll be able to afford the increase in your monthly payment if interest rates rise? My calculator will show you the mortgage payment at 3.50% and then you can go up to 4% and 5% to see the reality of what your payment might look like in a few years.

You should be going into the bank knowing the type of loan you’re going to get because you can’t just listen to people selling things these days. If there’s a better interest in mind for the seller they might sell you something that benefits them more than you. You should learn and get advice from a 3rd party who has your best interest in mind only. Learning something from the person selling it to you makes it more difficult to believe.

Anyone, or any couple, looking to buy a home in 2011 to live in should be getting a fixed rate mortgage. Between 5-10 years ago families were getting 15-17% interest rates which means if the economy picks up again they could reach that level at some point. That’s when you’ll be thankful you have the fixed rate.

I only agree with an ARM rate in 2011 when someone is flipping a home or planning on moving before the the rate starts to adjust. A person flipping a home will buy it for about 4-6 months in order to remodel and sell. A fixed rate mortgage will only cost that person more interest which makes an ARM rate a good idea. Anyone selling their home before the “3 year arm” or “5 year arm” starts adjusting will have saved money as well.

Most families looking to buy a home to live in should most definitely be getting a fixed rate mortgage. If your excuse for getting an adjustable rate is that the lower interest rate is the only way you can afford it then I highly recommend getting a cheaper home instead. That sounds like possible financial trouble to me because you can only live check to check for so long before something happens.

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The Free Mortgage Caclulator

Flipping a Home – Part 2

So you found a good home to flip that needs a little bit of work and you want to buy it, fix it up and sell it for a profit. It will take a lot of work but I’ll help you figure out if you can do it.

Borrowing Power

Your monthly borrowing power will first tell you whether or not you can afford the home and the extra loan to make the renovations. Multiply your monthly gross income by .40 to get your monthly amount that you can borrow from the bank. Then subtract your loans that you already have such as a current mortgage and monthly taxes, car loan, credit card loan (minimum payment) or student loan. You do not want to subtract your monthly housing expenses, car insurance or spending money per month.

The amount left over is the monthly amount you can afford for new loans and home taxes. That could be a home equity loan, mortgage loan, car loan or even a personal loan that doesn’t exceed that monthly amount.

Assume you have $1600 for monthly borrowing power

Use my free mortgage calculator to see what your new mortgage payment will be and then divide the yearly taxes by 12 and add the 2 together. Then figure out how much money you’ll need to borrow in order to do all the renovations you need to do.

You’ll want to start with the lowest interest rate loan first. Get whatever you can for a home equity loan if you can because it will be a low interest rate. If you’re car is paid off you can get a loan against that as well for a very low rate. Then you want to look into a personal loan which will be in the 12-15% range but don’t get dicouraged because the amount of interest paid over all won’t be that much. The last thing you can do is use credit cards to pay for the things you need done and pay them off when you sell the home later.

Buying the Home

When you’re looking at the home you want to renovate you should write down everything you want to fix and get estimates on them before making an offer to buy the home. This way you can start looking into the different loan possibilities to be sure you can follow through with this entire process before it starts. Don’t forget about the closing costs when buying a home and the 4-5% real estate commission when you sell the home.

Before making the renovations you should look at similar homes online for sale. Look at the amount of money they’re trying to get so you have an idea of the amount you can sell it for later. Also look at the decor of their homes because you’re going to be making a lot of changes and want it to be the best home on the market when it comes time to sell.

If you aren’t very good at picking paint color, rugs and cabinets I suggest hiring an interior designer to help with the choices you need to make. They charge about $150 per hour but you can use them for 4-5 hours to help you choose a great looking decor for you. Then you can do all of it yourself. They’re VERY good at what they do because that’s their job and they do it everyday just like you’re good at doing your job everyday.

Picking the price to sell your home for:

Picking the price of your home will be very difficult because you’ll think it’s much better than the rest of the homes on the market similar to yours. Trust me, the owners of the similar homes think theirs is better than yours as well. Remember, every month it takes to sell the home is another monthly mortgage payment and taxes you’ll have to pay and take right off of the profit you intend to make.

Speak to your real estate agent about the price and they’ll ask you if you want to stick it out for a high price or if you want to price it low and sell it fast. They know the real estate market like the designer knows design. They sell homes everyday and you should trust their judgement. If you don’t for some reason then get an opinion of another real estate agent because it’s possible you might not have found the right one immediately.

Using my mortgage calcluator will help you keep a close eye on your monthly borrowing power to see what you can afford each time you want to buy a home and flip it. Don’t forget about personal loans to help with the renovations. You can pay it off when you sell the home or keep it for the next flip you want to make.

Knowledge Will Save You Thousands
The Free Mortgage Calculator

Adjustable Rate Mortgages – ARM Interest Rates Explained

An adjustable rate mortgage is also known as an ARM rate which will adjust up or down each month or year depending on the prime rate. The prime interest rate is the base rate set by the government each month used as a starting point for mortgage lenders to base their interest rates on. So if it goes up then all adjustable rates will go up accordingly.

A fixed rate mortgage gives you an exact mortgage payment for the life of the loan while an adjustable rate mortgage changes once per year with a maximum of 2%. Usually the fixed rate will be slightly higher and look less attractive but it’s definitely the best option in this 2011 economy.

A fixed rate is the best option because after 30 years your adjustable rate could go from 4% up to 10% and the only good side to that gamble is that it could go down to 2% or so.. I believe an ARM rate was a great idea back when interest rates were in the 15-16% range because it had a lot of room to go down and save you money each month.

Types of ARM Rates

3/1 ARM
5/1 ARM
7/1 ARM
10/1 ARM

Usually people look at these adjustable rates because the interest rate is lower and offers a lower mortgage payment to start. Currently, a 30 year fixed rate is about 4.75% and the 3 year ARM is 3.50% which is a difference of $109/mo on a $150,000 mortgage. This makes it look pretty attractive to most people.

The 3/1 ARM means that your interest rate starts at 3.50% and stays fixed for 3 years. Then it adjusts up or down with the prime rate once per year each year after. So in 3 years if interest rates have gone up to 6.50% which isn’t that difficult your monthly mortgage payment would go from $673 to $948 per month.

Now if you were worried about saving $109 so much that you went with the adjustable rate in the first place then I doubt that you can afford this mortgage at 6.50%. And refinancing to a fixed rate at this point is even harder because it’s still higher than the adjustable. So you’d have to go from 6.50% to 7.50% for the fixed rate in hope to not have to pay 10% interest in the future with your adjustable rate.

Adjsutable rate mortgages are VERY scary and I highly recommend getting the fixed rate mortgage first or switching to a fixed rate as soon as possible because rates WILL go up eventually. I can’t tell you when, no one can, but we all know that it will eventually. So don’t ignore it until it happens, act now and save that well earned money!

The 5/1 ARM 3.75%, 7/1 ARM 4.00% and 10/1 ARM 4.25% are all the same concept but has slightly higher interest rates for each and a longer fixed payment. The 5/1 ARM keeps your first mortgage payment for 5 years, the 7/1 for 7 years and the 10/1 for 10 years.

Each of these adjustable rates will still change every year after the fixed rate portion is up leaving you stressed about where interest rates are going on a monthly basis.

Use my free mortgage calculator at the bottom of this blog and on my home page to play around with the current interest rates. Plug in the mortgage amount you plan on getting and then enter a rate of 4%, 5% and 6% to see the difference an interest rate can make on your monthly payment.

Play the Game instead

This game I’ll be playing is a great idea to pay your mortgage down faster. I have, in my mind only, got an adjustable rate mortgage (but I really have a fixed rate mortgage at 5% right now). I do this because when interest rates go up to 6.5% I’m going to recalculate my mortgage using my mortgage calculator and start paying that amount.

So $150,000 at 5% is $800/mo ($140,000 in interest) but when it goes to 6.5% it will be $950 which is $150 each principal payments to my mortgage each month which will save me $45,000 in interest over the rest of the mortgage!!!

If the interest rate goes up to 7.5% I’ll save another $25,000 because if I had my adjustable rate I wouldn’t have a choice but to figure out a way to pay the higher amount so I’m going to anyways. 

You only have to pay off one house in your life time so get it over with and stop paying a mortgage or rent of any kind!

Ways To Lower Your Mortgage Payment

It seems like during and after the housing crisis, those looking to buy were in the best position. Mortgage rates lowered, the government offered incentives and builders were practically paying shoppers to buy their homes. What about families already in a home that want to take advantage of the low interest rates? Well, luckily there are easy and hard ways to lower your mortgage payment. 

          A popular way to lower your mortgage payment is to refinance. This option may not be right for everyone. But may be ideal if your financial situation has improved. If you’ve paid off a large balance on a credit card or your income has increased then perhaps you’ll garner a better interest rate than you had before. This method may work especially well if you have a lump payment that you can apply toward the principal.

          You could also extend the term of the loan. Extending the term five years on a 15-year loan can save you over $100 on the monthly payment. However, by increasing the length of the loan, you pay and extra $20,000 in interest.

          If you don’t want to stay in your current home, there are also options.  You could downsize to a smaller home with less mortgage. One interesting option is to buy and live in a multi-unit rental property.

You can live in one unit and put the rent you collect from other units toward the mortgage. If this type of situation is right, you could avoid putting any money toward the mortgage at all. But you will have to deal with tenants.      

          What are you waiting for? Interest rates are still at historic lows.

Take advantage of the situation, talk to your financial institution about ways you can lower your mortgage payment.