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Home Equity Calculators Look into the Future
Staff - Mortgage Lenders Plus.com
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Calculating your home equity begins with a solid figure of the home’s current value. If you apply for a home equity loan, in all likelihood you’ll be paying for a professional appraisal. But for the purpose of using a home equity calculator, you can take a look at what similar homes in your neighborhood have sold for recently. If you have a realtor that helped you buy your home, that person will surely be able to produce a list of “comps” for you. Average those sales figures and call that your home’s current value. The next set of figures you’ll need to plug into a home equity calculator is the balance due on your first mortgage and any other existing loans pertaining to the home. That would include an existing home equity loan or home equity line of credit, or a home improvement loan that may be outstanding. If you take those figures to http://www.calculator.com/calcs/equity.php you will be able to calculate the amount of home equity available to you for three scenarios: the 80% loan-to value ration, the 100% loan-to value and the 125% loan-to-value. With these figures, you have a gross estimate of what lenders of various stripes will be willing to loan you, based on the amount you owe on the home and the amount they are willing to lend with respect to the home’s value. What the home equity calculator does not tell you is what portion of the interest you are paying on your current and potential additional loan will be tax deductible. It does not tell you what impact further borrowing will have on your primary mortgage’s requirement for mortgage insurance if your ownership in the property falls below 20% of its value. And, it will not issue the warnings that should accompany borrowing more against your home than it is worth. You can find a home equity calculator that looks into the future at http://moneycentral.msn.com/loan/home_equity_calculator.aspx. This calculator takes your home’s current value; the details on your mortgage and the payments left on it, folds in a yearly figure for home appreciation and tells you how much equity you will have in the house over the next ten years. The calculation presents a table of years one through ten with figures for home value, loan balance and pre-tax equity. The subjective figure in this calculation is the annual appreciation rate of the home. Once again, a realtor can help you with this through the use of appreciation histories for the neighborhoods in your area and the state as a whole. For a ten year projection, it’s probably best to rely on an extended average rather than the performance of the market over the last five overheated years.
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