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Mortgage Calculations

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Submitted By babyblueloveus
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Pages 2
Mortgage Calculations
Alisha Logue
MAN 222
Instructor Alan Jones
Sept. 26, 2013

Calculating a mortgage loan can be difficult. With the help of www.mortgage.com, they offer an online calculator to assist you. By using this tool you are able to plug in all the needed figures and find out the totals of taxes, interest, etc. One feature it also allows you to do is see totals with or without extra payments. (citigroup.com)Extra payments towards your loan's principal can substantially decrease the amount of interest you pay over the life of your loan. By paying extra amounts each month, you will be able to repay your loan much more quickly(2013).

For a $225,000 home, the mortgage loan is $21,375. A term of 15 years with a 5% interest rate with no extra payments is going to be higher than having extra payments. With no extra payments added, it will take the whole term of 15 years to pay off the loan. Adding a $100 extra payment will take only eight years and two months. You save about $4364 in interest paid by adding an extra payment each month.

Adding an extra payment a month, the taxes and insurance and the mortgage insurance would be the same if you did not have an extra payment. Taxes and insurance would run about $123 and the mortgage insurance $0. Between having an extra payment and not having one, the principal and interest is $100 difference. The principal and interest total is then $169 with no extra payment, $269 with an extra payment. Total payment with no extra payment is $292; with extra payment total is $392.

The same home for $225,000 with the mortgage $21,375, calculating it with a term of 30 years is not too much of a difference in amounts. If there are no extra payments, it will take the 30 years of the term to be paid off. If adding a $100 extra payment, it takes ten years and a month to pay off. Total interest paid

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