Amortization Schedule

Amortization Schedule Calculator

An Amortization Schedule Calculator For Homebuyers

Many would be homebuyers are not fully aware of the real investment in a home. The reality is there is a whole lot more money involved than the sticker price. A $200,000 loan over the course of a 30-year mortgage could easily add up to more than $400,000 in payments. An amortization schedule calculator shows how this happens. These tools are invaluable for showing the real bottom line involved in a loan over time.

An amortization schedule calculator is nothing more than a tool that makes it much easier to see how interest compounded over the life of the loan really works. That 7 percent quoted interest rate on $200,000, for example, ends up being a whole lot more than $14,000 over the life of the loan. Each year, that 7 percent is compounded on the outstanding principal. This means at the beginning of a loan, the payments almost only go to service the interest payments rather than the principal. There is no real way around this unless you, as a prospective homebuyer, happen to have $200,000 sitting around to buy a house outright. So having someone prepare a loan amortization schedule can help steer you in the right direction before you apply for a mortgage loan. The reality is, as a homebuyer, you can use an amortization calculator to your advantage; not just the bank's.

Using a calculator to your advantage will take doing things a little less orthodox than a bank or lender might want. For example, looking at the figures on a monthly amortization schedule can show a home shopper why a larger down payment than is being asked for might make a difference on the over-time bottom line. It can also show how perhaps getting a home that is a little less expensive might save money in the long run. An amortization schedule calculator is also a wonderful tool for showing the value of a good credit rating. A $100,000 loan at 10 percent interest is going to cost a whole lot more than the same home at 6 percent, for example.

You can find many amortization schedule calculator tools online while visiting financial websites. They are also available through computer program purchases. Most lenders, too, will use an amortization schedule calculator to give borrowers the final numbers for the truth in lending statement that shows the real bottom line of a loan. It's wise for first-time buyers and even old pros to take a look at the real numbers an amortization schedule calculator can show before they agree to the terms of a loan. There are ways to make the numbers work to one's advantage by increasing down payments, improving credit and even increasing principal payments each month.

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