Mortgage Payoff Calculator - Calculatorall.com
Use this mortgage payoff calculator for determining the payoff amount for your mortgage depending on different factors. It gives you detailed insights into paying off the loan in one go as well as by following the original schedule. The mortgage payoff calculator can also be used for two different situations and there are separate calculators available for both. First is when you know the remaining term of the loan while the other is when you don’t know the term of the loan. So, use whichever option you want according to the situations mentioned here and find out your total Mortgage payoff.
If You Know the Remaining Loan Term
If You Don't Know the Remaining Loan Term
Take any amortization schedule that is used typically, including the mortgages, and you will find two elements in the financial structure: principal and interest. They're created in a certain way that most of the amount that you pay in your beginning payments goes in interest, and as it continues to mature the scheduled payments start swaying towards repayments of the principal amount. It is because outstanding balance against total principal needs heavy interest for its upkeep as it's quite high in the start. This balance decreases over time as continual and diligent scheduled payments are made and eventually the burden of those higher interest payments is alleviated. This mortgage payoff calculator, along with the amortization table that is shown with it, gives you a detailed illustration of this concept. All you have to do is to provide some information and the calculator will give you all relevant data and many of your questions will be answered.
Keeping everything else the same and not taking into consideration the costs for external financial opportunities, the extra payments other than scheduled payments towards the mortgage can be quite beneficial financially as it relieves the pressure of making interest payments. For illustration purposes, paying $6 extra every month towards $200000 loan spanned over 30 years period can eventually relieve you of four payments by the time your mortgage ends. Just check it out yourself on the mortgage payoff calculator. The calculator may also be helpful in working out refinancing contingencies as well.
Making Biweekly Payments
Another option you have to pay your mortgage off earlier would be to go on a biweekly payment schedule. Such a schedule utilizes the fact that a year has 12 months and 52 weeks. So, if you pay half of your regular payments towards the mortgage every next week, you'll have 26 half-payments or 13 full payments by the end of the year. Generally, such a service is offered for free, however some banks may charge you extra for putting you on such a schedule. You may also be able to negotiate some good deal but make sure that you do proper budgeting for the extra payments. One thing to keep in mind, however, is that making extra payments only to principal rather than biweekly mortgage plans will earn the lender more interest at the end. Some sneaky lenders might also try to package a couple of extra payments into biweekly plans and these payments are applied to the principal amount in the end rather than when payments are received immediately. So, never fall prey to such tricks.
Prepayment Penalties
When it comes to lenders, mortgages turn out to be quite profitable investments and often allow them to make income that would take years otherwise. So, they never like to see their money machines getting compromised. There are a couple of prepayment penalties i.e. soft and hard. Soft ones will only hit with penalty in case of mortgage refinancing. The hard ones hit when the borrowers either sell their mortgage or opt to refinance it.
Different methods may be applied by lenders for the calculation of prepayment penalties and, therefore, the mortgage payoff calculator may not give insights into that. Examples of these penalties can include 80 percent amount of the interest of 6 months, or a specific percentage of outstanding balance. So, one can expect to pay a heavy fine, particularly, when the mortgage is in its early stages.
However, these prepayment penalties aren't too common these days unless your mortgage is coming from those shady sharks inside dark pawnshops. And, even if they exist on your mortgage document, they can be expected to get void after some time. Nevertheless, it is important that you take a close look at fine print of your mortgage document before getting into an agreement. In fact, you can even ask your lender about such a thing. VA loans, FHA loans and other loans that are insured by the federal credit unions have all prohibited prepayment penalties.
How This Mortgage Payoff Calculator Works?
As mentioned earlier, this mortgage payoff calculator can be used for two different situations. In fact, there is a different calculator for both the situations. Let's look at how each of these two calculators work.
The first one is for times when you know your remaining term of the loan. You can use this mortgage payoff calculator when you have information about your original loan and the remaining loan's term. It is a good option for new loans as well as the preexisting loans which haven't been supplemented ever with the external payments. The calculator requires you to provide details like original amount of the loan, original term of the loan, interest rate, and remaining term. You can also choose your repayment options from payback altogether, normal repayment or repayment with some additional payments. Provide all the information and hit the calculate button to find out the payoff amount and savings if there are any. Besides, additional information is provided for total payments and interest for situations if you payoff altogether or stick to the original schedule.
The second mortgage payoff calculator can be used if you don't know term length for your remaining loan. This calculator allows you to find out the principal balance that is unpaid, rate of interest and the monthly payments that you'll have to make. The calculator requires you to enter unpaid balance from the principal amount, monthly payment amount, interest rate and the repayment options that you'd like to go with. You can choose from normal repayment, repayment with additional payments, and biweekly repayment options. As a result, the calculator shows you the remaining term of your loan, total payments and total interest values along with the same values for normal schedule should you choose to stick to it.
So, use this mortgage payoff calculator and get insights into the repayment of your mortgage loan. The calculator can help you decide which of the available options would be better suited for you and what you'll be able to save by choosing that option for the repayments.