Outstanding mortgage balance calculation ( Simple Quick Loan)

Outstanding mortgage balance calculation ( Simple Quick Loan)

Outstanding mortgage balance calculation

The outstanding loan balance at any time during the term of the loan
can be calculated by locating the present value of the residual payments at
the given rate of interest. This amount will contain principal only.

Example associated with outstanding loan balance computation: 28000. 00

- Mortgage Term=*Interest Rate = 9%
-- Payment is monthly $284. 00

Query: What is the loan balance at the conclusion of year?

First, calculate the monthly payments using the loan amount ($100, 000 because
present value, term because 52 weeks, interest from 7%). This will provide you with a
monthly payment of $775. thirty. The Present Value of the Annuity formula should
supply here to solve for payment.

Next, in order to discover the outstanding loan balance you will have to find
the present value from the remaining payments. Use the payment of
$775. 30 since the payment function, the term is going to be 156 ((20-7)x12), and
. 583333% since the rate. This will provide you with an outstanding loan stability of
$79, 268. 02. Once again, the present value of the annuity formula should supply.

This means that at the conclusion of year seven the loan could be paid off in complete
for the amount associated with $79, 268. 02. Typically mortgage brokers will have a
balloon payment clause within the contract that will cost a fee for earlier
payment. This is since the lender will not obtain the same yield if mortgage
balance is not kept to maturity.

Similarly this is a table that shows both interest and principal
portions taken care of the first two many years.