What a Home Equity Calculator Can Tell You
With so many banks and lenders online, there are more and more terms and tools popping up all over the internet to help home owners and other would-be borrowers to figure the amounts they are bale to borrow, how much they would owe, etc. Sadly, many people have not been using the internet long enough to understand how to take full advantage of these tools. This goes especially for a home equity calculator.
A home equity calculator is an extremely valuable tool for anyone who wants to learn how much equity they have accrued in their home, how much they want to borrow, and how much their payments will be once they have added the balance of their home equity loan to their current mortgage.
If you're considering getting a home equity loan, then it is absolutely imperative that you learn to use a home equity calculator as quickly as possible. This indispensable little tool may not seem all that impressive right at first, but once you realise the true value of a home equity calculator, you'll quickly wonder how you ever calculated anything to do with your home mortgage without it.
Find Out How Much You're Worth
The most important thing that a home equity calculator can tell you, is just how much equity you have built up in your home that you can borrow against. This is calculated by subtracting the amount of your original mortgage that you have left to pay, from the current appraised market value of your home. Most lenders will allow you to borrow up to 85% of the difference, depending on your credit history.
The handiest home equity calculator will offer you the ability to calculate this amount even if you haven't had a recent appraisal done on your home, by offering you options to choose from that will estimate your home's current value. These options will take into account your geographical location, the square footage of your home, as well as the age of your home. You feed these statistics into the home equity calculator, and it will give you an approximate value of your home based on the current market average.
Find Out How Much You'll Pay
The second most important function of a home equity calculator, is that it will help you to determine just how much you can afford to borrow, based on your ability to repay. If you are on a fixed income, for example, you may want to only borrow a small amount so as to not raise your payments much higher than they are currently set. You will also be able to calculate how much your payments will be with a fixed rate loan, verses a variable rate loan. As you can see, a home equity calculator is an invaluable tool for any home owner.
