Three Steps To Reducing Your Mortgage Loan Calculator

It is a guest post by Chrismack . He is an experienced mortgage consultant and he understands how important getting the best mortgage rate is to homeowners and home buyers alike. He is specialized in home mortgage loan, mortgage loan calculator, mortgage rate calculator.

What is a mortgage calculator? What does a mortgage loan calculator do? Why is a mortgage payment calculator different from a common calculator? How does a mortgage home calculator work? Who benefits from a mortgage amortization calculator?

Following are the steps for reducing mortgage loan calculator are:
• In its simplest terms a mortgage is simply a loan secured by real estate. After the last payment from the homeowner, the property is free of encumbrance.
• Refinancing and home purchase mortgages are charged interest by the lending institution. Usually this interest is expressed as a percent such a 5% per year (annually).
• Mortgage interest can be paid many different ways such as interest only payments in which the borrower pays only the interest but reduces none of the principal until a later date. Principal means the face amount of the home loan or the amount you still owe.
• Most home mortgage loans in the United States are amortized. That is why mortgage applicants attempting to figure future payments with a common calculator get discouraged.
• Amortization is simply a way of reducing a mortgage debt through monthly payments of principal and interest. That's why a mortgage home calculator should actually be called an amortization calculator.
• A mortgage amortization calculator can tell you what your monthly payment will be if you know three things.
1. First you must know the term of the loan. Term refers to the period of time required to pay off the loan, for example 30 years, 15 years, or 40 years.
2. Second you must know the annual interest rate required to borrow on your mortgage. This is sometimes called the nominal rate (named rate) and is the not the same as APR (annual percentage rate).
3. Third you must know the principal or in plain language the amount of money you want to borrow.

If you know these three things you can solve for PI. "P" means principal and "I" means interest. PI is normally expressed as a monthly mortgage payment of principal and interest.

As long as you have at least 3 out of 4 factors (term, interest rate, principal, payment) you can solve for the remaining factor.