An amortization refers to the process required to pay off a debt. Typically this process entails periodic or regular payments that are used to both pay off the interest and principal balance associated with the loan. As a result of this process, a property owner's mortgage is thus regarded as an amortization.
While the payments associated with the loan are used to pay off both the interest and principal, the amounts distributed to each category of the loan vary based on agreement and the interest rate. To quell this confusion and to understand where and how your monthly payments affect your mortgage rate, and individual should utilize a mortgage amortization calculator.
The mortgage amortization calculator reveals how much of a homeowner's monthly mortgage payment will go over the lifetime of the particular loan, towards the principal and interest. Furthermore, the mortgage calculator amortization resource will allow the individual to see how much he or she can save by prepaying a percentage of the principal.
These features allow an individual to ascertain the most cost/effective payment plan, and the most affordable mortgage agreement or piece of property given their particular financial standing.
The mortgage amortization calculator first requires the user to enter the principal balance of the loan. Once this is filled, the user will then be asked to enter the interest rate, the length in years of the loan, and the starting month and year of the loan.
At this time, the user will be asked if they want to view the actual amortization table or if the results of the entries are solely desired. Optional entries for a mortgage amortization calculator include: the monthly added principal prepayment amount, the annual principal prepayment amount, and the one-time prepayment amount.
