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What Does Accelerated Mortgage Payments Mean?
With this tool, you can check how much interest you can save by selecting several accelerated mortgage payment methods. The following is a review of the mortgage calculator with accelerated payments:
Accelerated mortgage payments mean you make extra payments on the mortgage. The point is that you can pay off the total balance faster.
There are two ways you can do it; first, you pay extra on top of your debt. For example, you have a debt of USD 2,000. USD 1,800 of which is the principal, and USD 200 is the interest.
You can pay an additional USD 600 per month on top of the USD 2,000 you have already paid. Or, you can choose to make a lump sum payment.
For example, your monthly mortgage payment is USD 2,000. When you get a bonus at work, you have an extra USD 5,000. You can use the money to make lump sum payments on your mortgage.
However, paying off your mortgage before the final maturity is an attractive option when you want to lower your monthly debt payments more quickly.
But to make that decision depends on several different factors. For example, current interest rates, monthly payments, and whether you can afford to pay the final loan amount outright.
For most people, it’s probably worth it. But you should still assess your financial situation first before doing so.
Therefore, it is important to access the mortgage calculator with accelerated payments to find out the calculation of your monthly/all-in-one payment based on certain aspects to shorten your mortgage term.
What is a Mortgage Calculator with Accelerated Payments?
When you are in a credit period, you often experience a dilemma when you suddenly have large funds. You are thinking about paying off debt as soon as possible and looking for ways to calculate accelerated mortgage repayments.
Many debtors want to reduce their burden and maximize cash flow, so they choose to pay it off as the best way. However, if you are determined, you need to use a mortgage calculator with accelerated payments.
This calculator allows you to estimate how much you will pay on a monthly mortgage. Then, you can also find out how much your payment will change if your mortgage is paid off ahead of schedule.
How to Apply The Accelerated Mortgage Payment Calculator?
To estimate payments more accurately, you can use an online accelerated mortgage payment calculator. If you want to know how to apply, here are the steps:
1. Mortgage Input
The first step is that you need to define a few parameters to run the accelerated mortgage calculator. Some of these essential parameters are:
- Loan amount: your remaining balance, or when a new loan, provides the initial loan value.
- Mortgage term: the original or remaining term of the loan.
- Types of acceleration: there are three ways to calculate it when using a mortgage acceleration calculator. You can accelerate your payment frequency by a bi-weekly, bi-weekly mortgage, or monthly with overpayment.
- Mortgage points: prepayment as a percentage of the loan amount.
- Due date: the deadline when the monthly payment.
- Prepayment: additional prepayment.
- Additional payments: the additional amount paid in a certain payment period or your overpayment.
- Interest rate: the annual interest rate.
2. Mortgage Summary
When you have determined all the parameters in the mortgage calculator with accelerated payments, you can see the results listed in the summary table.
The table will describe your payment without accelerating, terms, payoff date, total interest, and total payments.
Then, if you want to make an accelerated payment, this table will also display a similar description as the payments without an acceleration table.
So, you can check how the accelerated option will change your standard monthly payment.
3. Balances and Schedules
After that, follow the progress of the mortgage balance, which you can see in the dynamic chart and amortization table. Usually, these two are at the bottom of an accelerated mortgage payment calculator.
Unfortunately, not all calculators have this feature, even though this feature helps you in reading the summary. Therefore, try to find calculator tools that have similar features.
That’s an interesting review about the mortgage calculator with accelerated payments. By using this tool, you can estimate how much money you have to spend when you want to speed up paying off your mortgage.
Options for Remortgage
The effects of Covid-19 in the last two years have had an impact on almost all areas of life including real estate. Many property owners have to experience default because their business is losing money. Therefore one option that can be done is to do a remortgage.
Remortgage refers to the process of switching an existing mortgage to a new lender or a new mortgage product with the same lender. This is usually done to get a better interest rate, change the terms and length of the mortgage, or to access equity in the property.
Remortgaging can be a complicated process and it’s important to consider factors such as fees, early repayment charges, and the long-term impact on mortgage repayments before making a decision. (DW)
