3 Tips to Using an Interest Only Mortgage Calculator
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How can I best utilize an interest only mortgage calculator?
Interest only mortgages are prevalent in a current market where interest rates are so low. Using an interest only mortgage calculator can help you get a clear picture of your mortgage situation from the beginning of your loan on through until the end. Here are three quick tips to using an interest only mortgage calculator.
- Know your interest only term. For the first part of your loan's life, you will only be making payments towards your accrued interest. Whether you have a 6 month or 10 year interest only period, use an interest only mortgage calculator to figure the payments you will have during this period.
- Stay ready for after the adjustment. Once your interest only period ends, you will see a great increase in your monthly payment. Using an interest only mortgage calculator can fill in the blanks as far as what your new payments will be. Be sure to plug in the reduced term remaining on the loan to see what your accurate payment will be.
- Refi or Stick It Out? An interest only mortgage calculator can let you know if you would be better off refinancing to get out of the adjustment to your payment or riding out the loan once it adjusts. This will depend on the current interest rates vs. the rates when you got the original loan.
Use the calculator to plug in the data and see what your best move is.