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Refinancing Mortgages in Kitchener with a Mortgage Calculator

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Refinancing Mortgages in Kitchener: Using a Mortgage Calculator

When refinancing mortgages in Kitchener, you should use a mortgage calculator to find the best payment plan that works for you. Traditional mortgages are created so borrowers own their house once they pay off the mortgage. Since you own the house, you are not just paying the interest off, but also the principal that gives you equity. Essentially, the bank rents the principal from you, whereas in an interest-only mortgage, the borrower is actually renting the property from the bank.

How to Calculate Your Mortgage

Mortgage interest rates are compounded, which is why it is best to pay off the interest rate as quickly as possible. When paying your mortgage, calculate the necessary monthly payment to pay down the borrowed principal over the term of your mortgage. You can calculate your mortgage more easily using online mortgage calculators. If you want to know how much you owe the bank at the end of your term, you can multiply the monthly payment over the number of payments and subtract the principal from it. After you have done your calculations, you may feel like you're throwing money away paying the lender; however, the payments may be tax deductable with the savings correlated with your tax bracket when associated with an investment or business.

Planning Your Future

Mortgage calculators can help you with more than calculating your prime mortgage. They are great for planning out possible future scenarios. For example, a mortgage calculator can help you plan out different scenarios when buying your Kitchener home. You can calculate your payments based on financial gains, such as a raise or a new job, etc. You can also plan in reverse for other expenses that may take away from your monthly mortgage payment, such as a new car, a vacation, or even post-secondary education. Beyond planning for the future, the calculator will help you strategize whether you are better with bi-weekly or monthly payments and how long you should take to pay off the mortgage. You should also calculate whether buying is your best option since you may end up saving more when renting, or to see how much profit your landlord is making off your payments.

Is Refinancing Right?

Mortgage calculators are also a great tool to use when refinancing your home. This helps you figure out your current and future debts and how to best pay them off with refinancing. Since interest rates are currently quite low, many home owners find it in their best interests to refinance their mortgage. This allows for leverage of your monthly income to help restructure and pay off debts better, and to save you money.

The Next Step

Using a mortgage calculator when planning your mortgage is one of the first crucial steps to organizing your finances. However, it is just as important to run your calculations and needs through a licensed professional to get a plan that works best for you. Consult with different mortgage brokers, loan specialists, or financial advisors so you are knowledgeable and equipped for mortgages and refinancing mortgages in Kitchener. 


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