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Home Equity Prediction Calculator


Trying2getAhead
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I know there are countless normal home equity loan calculators out there, but I am trying to predict how long it will take to build a certain amount of Home Eq in order to prepare for investments...

Although I know it is not a fixed mathematical equation - due to the foundation of Current Fair Home Value given by an appraisal at time of loan application, I would like to figure out using the current value (since real estate will not dip below where it is now, and has not ever done so over a certain period of time historically) how long it will take me making certain payments per month on a fixed home loan to build a certain amoount of equity. Any ideas? :)

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There are calculators out there on the net where you take your current loan amount and payment, input how much you want your balance to be by date x, and then they tell you how much additional monthly payment (to apply to principal) you need to make to have a balance of x by said date.

I did this two years ago to determine how much extra I need to pay on my rental property every month to get my balance down to 78% of the original loan balance by month 60, thereby allowing me to eliminate MI ($1000/yr!).

Keep in mind that does not equate to ltv because original loan balance is a fixed number and the current value fluctuates. Nevertheless, you at least have a starting point. I'd suggest applying fiscal conservatism the situation. If you need x equity, assume 0% appreciation over the next 5 years and 3% appreciation over a 10yr period. And for your purposes, if home values beat this estimate, then better for you (but don't count on it...).

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There are calculators out there on the net where you take your current loan amount and payment, input how much you want your balance to be by date x, and then they tell you how much additional monthly payment (to apply to principal) you need to make to have a balance of x by said date.

I did this two years ago to determine how much extra I need to pay on my rental property every month to get my balance down to 78% of the original loan balance by month 60, thereby allowing me to eliminate MI ($1000/yr!).

Keep in mind that does not equate to ltv because original loan balance is a fixed number and the current value fluctuates. Nevertheless, you at least have a starting point. I'd suggest applying fiscal conservatism the situation. If you need x equity, assume 0% appreciation over the next 5 years and 3% appreciation over a 10yr period. And for your purposes, if home values beat this estimate, then better for you (but don't count on it...).

EXCELLENT points, thanks a lot.

Would you have a link to the calculator(s) you referred to or use?

Also, in order to remove PMI, does it automatically disappear upon a certain number, or due you have to make a special request to the bank or insurance company (or both) at a certain point in time?

I would like to estimate how long until I can drop PMI... as well as how long until I have 30,000 in equity in the home based on your 0%-5yr/3%-10yr figures, THANKS!!!

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EXCELLENT points, thanks a lot.

Would you have a link to the calculator(s) you referred to or use?

Also, in order to remove PMI, does it automatically disappear upon a certain number, or due you have to make a special request to the bank or insurance company (or both) at a certain point in time?

I would like to estimate how long until I can drop PMI... as well as how long until I have 30,000 in equity in the home based on your 0%-5yr/3%-10yr figures, THANKS!!!

Sorry I have no link. Try a few google searches. There are many calculators out there. I have one of my mortgages with National City. They even provide an online calculator that does something similar (another reason to like them- they want you to pay down your loan and help you do it with free online payment and/or monthly deduction of amounts that go directly to principal reduction).

If you want your PMI to drop off, I think you need to make a special request. Check with your lender. There may even be an appraisal involved. The way my MI works is that when it gets to 78% of the original loan balance, it drops off regardless of value (assuming no mised payments??) I don't know. I'm not quite there yet. I've only reduced the principal on the note by $11000 at this point. $30,000 more to go. :p

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