Home arrow Resources arrow AJC Articles arrow Loan Software Makes it Easy to Track Mortgage Payoff - 2009-12-27

Your Cart

Show Cart
Your Cart is currently empty.

Login

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.
 
< Prev   Next >

Upcoming Events

John Adams Presents


LANDLORD SURVIVAL TRAINING

with John Adams
Tuesday, February 28th

Being a landlord can be a rewarding experience. It can also be a difficult one if you don't have the knowledge and understanding of what the process requires.

Few schools offer degrees in property management, so most landlords learn "on-the-job" through acquired knowledge and on-the-job experience, essentially re-inventing the wheel. This is an expensive and depressing way to learn anything.

Whether you're a full-time landlord or just getting ready to purchase your first rental property, whether you are a licensed Georgia real estate professional or an accidental landlord, this seminar will help you improve your property's value, increase your cash flow and decrease your expenses, from attracting (and retaining) good tenants to maintaining your property to understanding your rights and obligations under the law.

For more details and to register click HERE

PROPERTY TAX REDUCTION WORKSHOP
with John Adams
Tuesday, March 27th

One of the significant annual expenses faced by any Georgia property owner is ad valorem property tax. Depending on where you live, it can be as high as three percent of the property's fair market value, and it must be paid year after year after year.

As a result, efforts to minimize this expense are not only worthwhile, they are encouraged by Georgia law. The phrase "ad valorem" means that each property is taxed based only on its value, and no one is required to pay a penny more than the minimum the law demands.

At the Property Tax Reduction Workshop, real estate expert John Adams will review the system he has used for over thirty years to reduce valuations and assessments in Georgia counties and municipalities, saving himself literally hundreds of thousands of dollars over the years.

In this 3 hour information packed seminar, John will teach you how to:

1. Understand the legal process of Property Tax Assessment
2. Meet the newly uniform Tax Deadlines
3. File your own Property Tax Return with a realistic valuation
4. Document your PT-50R with facts to support your case
5. Proactively meet with your Appraiser to reach an agreement
6. Protest your Notice of Assessment in an Intelligent manner
7. Give the Assessor an Opportunity to Save Face
8. Appeal to your Board of Equalization, in person or by mail
9. Make Your Case to the BOE
10. Take Your Case to Superior Court if necessary

If you are not doing all these steps now, you are likely costing yourself hundreds or thousands of dollars a year. If you own just one house, you could easily save over a thousand dollars over the next three years. If you own properties valued collectively over a million dollars, you are literally throwing away your profits year after year.

For more details and to register click HERE