I'm trying to understand BALLOON MORTGAGES. Can someone help me understand the following example? - amortization calculator with balloon payment
I entered the following line into the balloon mortgage calculator:
Loan of $ 100,000.00
Interest rate 6.000%
Duration 10 years
Amortization 30 years
My question is:
Relocating to 119 monthly installments of $ 599.55 Why pay $ 84,285.33 to the world? If everything has to be write-offs of 30 years, unless the amount on the balance of the payment of 241 times $ 599.55 ($ 144,491.55)? If not, where track 84, $ 285.33?
Monday, January 11, 2010
Amortization Calculator With Balloon Payment I'm Trying To Understand BALLOON MORTGAGES. Can Someone Help Me Understand The Following Example?
4 comments:
I am not a lawyer. I am in the area of mortgages. I'm not an accountant. I am not a broker.
The term "balloon means that it is in the air or goes.
B1] picture of a hot air balloon to the ground. It is the mortgage with the interest of full, as it is - now, this minute.
B2] The balloon is filled with air and propane fires. Monthly payments made, but the ball is still on the ground. This is] because of the seriousness of [the interest of maintaining the loan is repaid in full.
B3] begins to inflate the balloon. Monthly installments to be paid.
B4] When the ball on the ground, rarely takes a vertical direction. [Still The interest in control.]
B5] It takes a bit to cut down the bushes and trees. Finally Gets cables and tall buildings. [The mortgage will be reduced.]
B5] The wind catches the ball and takes it in the sense of the breath, but the ball is in motion.
B6] then use the propane in the tank. But the aeronaut wishes tor go further and do something like balloons. [The date of the balloon payment is approaching.]
B7] The ball remains a huge hole. [The balloon payment is due.]
The information I gave was positive [in terms of simple interest, fixed-rate mortgage amortization that a mouthful, what is this?]. Lenders know the following facts about mortgages:
1] Long before the effective date of the last payment, what is said in the mortgage market, the vast majority of the mortgage paid in full.
2] The concept of most of the mortgage: The interest on the remaining amount.
3] Contrary to what most people think or believe, interest and principal payments are not evenly over the entire life of the mortgage spread. The vast majority of the interest paid is based on the principle of the loan. The balance point - that the greatest value and equality of others not - on, is usually some time after the mortgage, more than half of the payment. Often the first mortgage is paid at least 2 / 3.
In the case of balloon loans as a loan of 30 years with equal monthly installments over 30 years. Where: The monthly payment is $ 599.95 for 119 months or payments. But is the explanation, it still has the vast majority of the most important reason for the loan.
Borrowers should have the following questions:
1] open-end mortgage.
2], a fixed interest rate, repayment is positive [ie the mortgage.]
3] No prepayment penalty.
4], a repayment plan to follow and the amount of the mortgage is reduced.
To save a game has a lot of money, who do pay the mortgage, the payment of an additional capital shall be in the next month with the payment of the current month.
Accompanying the current month with the major additional month should be a piece of paper with the account number and a short message, saying: "I enclose the payment this month of principal and interest on the amount of [should always be equal to] $ - --- .
In the opinionDITION is the additional amount of $ --- ----- is the most important [month, year], I want to apply the balance of your loan. In accordance with the repayment plan I have, it reduces the mortgage balance $----
Thank you for your question. I enjoyed taking the time to answer your question. She has a great job - and not just for your information, but also for all those interested in reading my answer.
I wish him good luck!
VTY,
Ron Beru
Yes, that's my real name
With the balloon loan, the payments are amortized over 30 years. However, after the end of the world to repay the loan in full. The $ 84,285.33 is what is still on the loan. $ 599.55, including interest.
It is smaller, because the interest on the 120th Payment will not pay.
Amortization of the loan within 10 years and 20 years, saving $ 60K in interest.
With the need mortgages, the interest earned before being loaded. You can not entitled to repay interest on 30-ten years for the loan in 10th
Make sense now?
calculated the interest on the mortgage market before the rest is for the payment has the ball!
30 years interest payment at the end of the world! You pay what amounts to 20 extra years of interest! not a good business to have all the interest rates of 5% x 100,000 = 5,000 x 20 = 100000-say, the money to repay the loan officer for 30 years, so you can make the payment within 10 years. Do not worry!
Mortgage Consultant
Mortgage
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