Re: Couple of newbie questions… - Posted by Chris
Posted by Chris on February 20, 2000 at 05:23:35:
You need to buy yourself a financial calculator. These are under $30 and easily available at Target,etc. There are also financial calculators available all over the web that you can download or use right at the site. A last resort is to buy an Amortization book at the bookstore for a few bucks in the financial section.
If you know three values out of four you can compute your answer. The values are PMT,PV,I/Y,N.
For example you have (from number two)-
N (number of payments in months)=120
I/Y(Interest rate per year)=8% -my own number
Answer=$545.97 per month for principal and interest(PMT key on calculator which is the fourth number).
If you pay the loan off early as you would if you refinanced or sold the property you simply pay off the remaining principal(which your calculator also will tell you). Some mortgages have a prepayment penalty in case you pay your loan off early which would add to the principal.
In your top example you used you would owe more at the end than when you started even if it was an interest only loan. You have $30,000 at 10% interest. Interest only payment is $3,000 per year or $250 per month. You would with this example owe $50 more per month than you could pay with your $200 payment.
I don’t know what info is provided in the foreclosure report you receive so it is hard to answer your question.
Please repost on the main board if anything is not clear. This is the guru board so less people see posts than would on Newsgroup I.