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Fixed-Rate Amortization Schedule

So you're interested in purchasing a home, a car, or some other expensive item. You'd like to know how much the payments are going to be and how much difference a quarter-percent difference in the interest rate would make. You'd also like to know how much the home will loan will actually cost you in interest. Finally, you'd like to know how much it would save you if you took out a shorter loan, made extra payments or paid extra money periodically. This tool will perform the necessary calculations to help you answer these questions.

Don't forget that your monthly house payment probably will include money for an escrow account--that usually includes, at a minimum, home-owner's insurance and property taxes. If there are other taxes or dues associated with the property you're looking into, the bank may require them as part of your escrow account, too. (Don't be bashful...ask before you buy.) Also, if your down payment is lower than the bank likes, you may have to pay for something called private mortgage insurance or "PMI." These are all extra costs that the bank, county, state, homeowner's association, etc., add to your actual loan payment, so don't get blind-sided by them.

Your total payment, including required escrow, should not exceed one third of your family's net (after-tax) income. This takes into consideration the current tax deductions for home-loan interest.

Also, if you're buying a home, be sure your homeowner's insurance covers full replacement costs rather than a depreciated value. You're better off to accept a higher deductable amount than to give up full replacement costs. (Some states may call it something else. Some jurisdictions require insurance companies to sell only full-replacement policies, but others do not.) If you happen to know where to find a few contractors in your area, ask them which companies operating in your area actually pay for better repair jobs on fire- or wind-damaged properties. Buy them a cup of coffee and listen to their answers before you decide whose policy you want to pay for--it could save you thousands of dollars and a big mistake. Finally, before you take out a policy, check out the company's credit and business ratings at www.AMBest.com to be sure they're not in financial trouble that could affect their ability to pay should some major disaster hit your new home and others in the same area.

Another hint...in many cases (but not always) it's considerably cheaper to insure both home, autos, boats, Rv's, etc., with the same company.

Finally, we heartily recommend that you purchase a term life insurance policy to cover the amount of your mortgage plus at least five years worth of escrow plus the cost of a new HVAC system--just in case the unthinkable should befall you and you're not there to take care of your family's needs. If your family is dependent upon more than one income, a similar policy on each breadwinner is needed and you can usually get a small discount if they both come from the same company.

Finally, we also heartily recommend that you strive to have enough money put back to cover that new HVAC system when--not if--the old one fails. We use the HVAC system as a typical guideline because it is usually the most expensive single-point-of-failure in the house. If yours has something more expensive that can fail...it will. So, save up for it before, not after, it happens.

If all this sounds terrible, just know that we're on your side.
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