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Loan Software Makes it Easy to Track Mortgage Payoff - 2009-12-27 |
If you're like most homeowners, you make monthly loan payments to your mortgage lender. And the last week in the year is a great time to see what progress you've made toward paying off that loan.
For today, let's agree to exclude non-loan expenses that may be included in your required monthly remittance. Fees such as taxes and insurance are "escrow deposits" and are not directly related to the monthly loan payment you make.
Remember that your monthly loan payment consists of two parts: principal and interest. If your loan is a fixed rate instrument, then the monthly payment of principal and interest is likely fixed for the life of the loan.
The interest is the cost you pay for borrowing the money. The interest charge is calculated by multiplying the current loan balance by your interest rate, then dividing by twelve. That interest charge is deducted from your monthly payment each month, and the remainder is applied toward repayment of the principal balance.
Because your loan balance is declining each month, the amount of interest you are charged also declines each month. And as the interest charge decreases, the principal amount of your payment increases.
The minimum monthly payment is set to "amortize" (literally, pay back) the loan in the exact number of years you selected when your loan was originated. So if you chose a 30 year fixed rate loan, your monthly payment was calculated to pay off the loan in exactly 360 equal installments. You may have been given an "amortization chart" when your loan began showing the monthly split of principal and interest as well as the declining principal balance.
It's that declining balance that owners find it fun to review on an annual basis. It literally shows the loan balance dropping month after month. Under most simple interest loans, the early payments are largely interest. In the latter years, most of your payment typically goes to principal payoff.
If you don't already have one, it's easy to re-create your amortization schedule.
Visit bankrate.com and click on "calculators" then "mortgages." One of their many options allows you to create a complete loan repayment schedule online. If you prefer a free program you can load on your computer, visit money99.com and click on "resources," then "documents," and finally "downloads." At the end of the list, select Mortgage Wizard. I have used this program successfully for years.
Don't be surprised if your own calculations differ by a few pennies from your "statement of interest paid" from your lender. There are several approaches to rounding used by lenders and they can affect your balance. If you are off by more than few dollars, call your lender and ask for an explanation.
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Upcoming Events
"EPA CERTIFIED RENOVATOR" TRAINING
Do You Work with Real Estate? You Must Be LEAD SAFE CERTIFIED as of April 22nd.
To all owners, realtors, investors, property managers, contractors, electricians, plumbers and painters. Do you ever engage in any level of renovation? If so, read this:
Any renovator, from owners to contractors, from plumbers to electricians to painters, who disturbs lead paint while working in a pre-1978 home, school or day care center, now must be Lead-Safe Certified. If you’re not, you can face tens of thousands of dollars in fines. Plus, you put the health of yourself, your workers and your customers at risk, which could result in lawsuits. One simple 8 hour class certifies you for five years. It’s that easy.
Since April 22, 2010, there are new Federal rules regarding how you perform any work that disturbs lead-based paint in homes, child-care facilities and schools built before 1978. You now must be EPA certified and follow specific work practices to prevent lead contamination.
Failure to follow the new rules can result in federal fines of up to $32,500 per day or up to 5 years in federal prison, or both. Don’t take a chance - it’s not worth it.
How To Become an EPA Certified Renovator:
In just one day, John Adams will teach you how to meet all EPA requirements and become an “EPA Certified Renovator.”
Don’t wait - register now! Click on “Seminars” and choose your day!
- Friday, July 30th at Suburban Plaza, 2643 North Decatur Road and Church Street, Decatur , Lower Level, beneath Hancock Fabrics
8:30 A.M. to 5:30 P.M.
- Friday, August 06th at Suburban Plaza, 2643 North Decatur Road and Church Street, Decatur , Lower Level, beneath Hancock Fabrics
8:30 A.M. to 5:30 P.M.
- Friday, August 13th at Suburban Plaza, 2643 North Decatur Road and Church Street, Decatur , Lower Level, beneath Hancock Fabrics
8:30 A.M. to 5:30 P.M.
- Friday, August 20th at Suburban Plaza, 2643 North Decatur Road
and Church Street, Decatur , Lower Level, beneath Hancock Fabrics
8:30 A.M. to 5:30 P.M.
- Friday, August 27th at Suburban Plaza, 2643 North Decatur Road
and Church Street, Decatur , Lower Level, beneath Hancock Fabrics
8:30 A.M. to 5:30 P.M.
Total Course Cost: $295, includes exam and EPA-HUD 400 page manual
Space is limited to 20 participants.
Training services provided by Seagull Environmental Management Co, Inc.
Courses are approved for purposed of certification under Section 402 of TSCA for the Certified Renovator.
This course has been approved by the Georgia Real Estate Commission for 7 hours of Real Estate Continuing Education
For more information, call toll-free 888-373-0029
Click above on the "Seminars" button to register
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John Adams Presents
“The MetroVestAtlanta.com REO Bus Tour”
Get on the bus for a tour of South DeKalb County’s “Real Estate Owned”
homes. Each house you visit will be available that day for purchase at
a giveaway price, regardless of current condition. Financing is
available!
Throughout the day, we will hear from mortgage providers, people in the
construction business and property managers all discussing today’s
situation with Bank Owned REO properties.
Who Should Attend: Investors, Realtors, Lenders, Prospective Buyers, and
anyone who might want to buy a super-bargain house and either do the
rehab themselves or have all the work performed by the pros.
You will see abandoned dumps and finished products, and everything
in between. And Snap will be there to answer all your questions and
explain the rehab and rental strategies.
Saturday, August 21st, 9:30 AM to 4:00 PM
Your $49 fee includes the bus tour and lunch. You must make reservations. No walk-ups.
There is limited seating and the seats are filling fast. ACT NOW before you miss the bus.
We will be meeting at Suburban Plaza, 2643 N. Decatur Road and Church Street, Lower Level, Decatur 30033 (beneath Hancock Fabrics, in the arcade.)
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