amortization schedule http://www.wisebread.com/taxonomy/term/5754/all en-US DIY Mortgage Acceleration http://www.wisebread.com/diy-mortgage-acceleration <p><img alt="woman pausing from paint project" title="woman pausing from paint project" width="225" height="337" align="absbottom" src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/wisebread_imce/womanpainting.jpg" /></p> <p><span style="font-size: 10pt; font-family: Verdana">Do-it-yourselfers who are weary of yet another trip to the home improvement store may like this DIY project. It has the possibilities of increasing home equity just as quickly as a bath remodel or new deck. </span></p> <!--break--><!--break--><p><span style="font-size: 10pt; font-family: Verdana"> </span><span style="font-size: 10pt; font-family: Verdana">You may have already built your own amortization schedule using a <a title="guide" href="/how-to-build-your-own-amortization-schedule-0">guide</a> I posted earlier. And, you may have been figuring out how to accelerate your mortgage payoff by entering amounts in the monthly payment column that are higher than the standard payment. </span><span style="font-size: 10pt; font-family: Verdana">Just to make DIY mortgage acceleration really easy, I&rsquo;ve created three schedules in <a title="one file" href="/files/fruganomics/DIY_acceleration.xls">one file</a>: </span></p> <ul> <li> <div style="margin: 0in 0in 0pt 0.25in; font-size: 10pt; text-indent: -0.25in; font-family: Verdana">Original Amortization Schedule</div> </li> <li> <div class="sub-heading" style="margin: 0in 0in 0pt 0.25in; font-size: 10pt; text-indent: -0.25in; font-family: Verdana">$100-a-month Accelerated Amortization Schedule (for disciplined DIYers who have committed to paying an extra $100 per month beginning with the very first payment)</div> </li> <li> <div style="margin: 0in 0in 0pt 0.25in; font-size: 10pt; text-indent: -0.25in; font-family: Verdana">Real-life Accelerated Amortization Schedule (with semi-random extra-payment amounts based on financial life events such as 1) having extra $600 per month for 2 years between car loans from year 5 to year 7; 2) using $300 of a yearly tax refund 3) applying year-end bonuses, ranging from $100 to $2,100).</div> </li> </ul> <p><span style="font-size: 10pt; font-family: Verdana">The mortgage-loan givens or assumptions for all three scenarios are: </span></p> <ul> <li> <div style="margin: 0in 0in 0pt 0.25in; font-size: 10pt; text-indent: -0.25in; font-family: Verdana">$200,000 <a href="http://www.wisebread.com/redir/mortgagerates">mortgage loan</a></div> </li> <li> <div style="margin: 0in 0in 0pt 0.25in; font-size: 10pt; text-indent: -0.25in; font-family: Verdana">30-year fixed rate loan</div> </li> <li> <div style="margin: 0in 0in 0pt 0.25in; font-size: 10pt; text-indent: -0.25in; font-family: Verdana">6% interest rate</div> </li> </ul> <p><span style="font-size: 10pt; font-family: Verdana">Here are the results of paying according to the Original, $100-a-month Accelerated, and Real-Life Accelerated Amortization Schedules: </span><span style="font-size: 10pt; font-family: Verdana"> </span></p> <p><span style="font-size: 10pt; font-family: Verdana"><strong>Original</strong> (Use &ldquo;edit,&rdquo; &ldquo;go to,&rdquo; &ldquo;ORIGINAL&rdquo;)</span></p> <ul> <li> <div style="margin: 0in 0in 0pt 0.25in; font-size: 10pt; text-indent: -0.25in; font-family: Verdana">Number of Years for Payoff: 30 years</div> </li> <li> <div style="margin: 0in 0in 0pt 0.25in; font-size: 10pt; text-indent: -0.25in; font-family: Verdana">Total Interest Paid: $231,676.38</div> </li> <li> <div style="margin: 0in 0in 0pt 0.25in; font-size: 10pt; text-indent: -0.25in; font-family: Verdana">Total Payments Made: $431,676.38</div> </li> </ul> <p><span style="font-size: 10pt; font-family: Verdana"><strong>$100-a-month Accelerated</strong> (Use &ldquo;edit,&rdquo; &ldquo;go to,&rdquo; &ldquo;ACC&rdquo;)</span></p> <ul> <li> <div style="margin: 0in 0in 0pt 0.25in; font-size: 10pt; text-indent: -0.25in; font-family: Verdana">Number of Years for Payoff: 24 years, 7 months</div> </li> <li> <div style="margin: 0in 0in 0pt 0.25in; font-size: 10pt; text-indent: -0.25in; font-family: Verdana">Total Interest Paid: $182,537.97</div> </li> <li> <div style="margin: 0in 0in 0pt 0.25in; font-size: 10pt; text-indent: -0.25in; font-family: Verdana">Total Payments Made: $383,234.81 (payments will be slightly less as last payment will not be a full payment)</div> </li> </ul> <p><span style="font-size: 10pt; font-family: Verdana"><strong>Real-Life Accelerated</strong> (Use &ldquo;edit,&rdquo; &ldquo;go to,&rdquo; &ldquo;<span style="text-transform: uppercase">Random</span>&rdquo;)</span></p> <ul> <li> <div style="margin: 0in 0in 0pt 0.25in; font-size: 10pt; text-indent: -0.25in; font-family: Verdana">Number of Years for Payoff: 21 years</div> </li> <li> <div style="margin: 0in 0in 0pt 0.25in; font-size: 10pt; text-indent: -0.25in; font-family: Verdana">Total Interest Paid: $152,555.51</div> </li> <li> <div class="MsoNormal" style="margin: 0in 0in 0pt 0.25in; text-indent: -0.25in"><span style="font-size: 10pt; font-family: Verdana">Total Payments Made:</span><strong style="font-size: 10pt; font-family: Verdana"> </strong><span style="font-size: 10pt; font-family: Verdana">$353,173.46 (payments will be slightly less but I didn&rsquo;t want to change the flow of the amortization schedule)</span></div> </li> </ul> <p><span style="font-size: 10pt; font-family: Verdana">You can download the file and enter information from your own life: your mortgage amount, your term, and your interest rate. Then, have fun figuring out how fast you can accelerate your mortgage payoff. </span><span style="font-size: 10pt; font-family: Verdana"> </span><span style="font-size: 10pt; font-family: Verdana">If you decide to accelerate, make sure that your mortgage servicing company knows that the extra amounts you are paying each month are to reduce the principal.</span><span style="font-size: 10pt; font-family: Verdana"> </span><span style="font-size: 10pt; font-family: Verdana"> </span></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/julie-rains">Julie Rains</a> of <a href="http://www.wisebread.com/diy-mortgage-acceleration">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-build-your-own-amortization-schedule-0">How to Build Your Own Amortization Schedule</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/speeding-through-your-mortgage-0">Speeding through your mortgage</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-keep-the-low-teaser-rate-for-your-mortgage">How to keep the low teaser rate for your mortgage</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-secrets-to-refinancing-an-underwater-mortgage">7 Secrets to Refinancing an Underwater Mortgage</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-interesting-ways-technology-can-help-you-buy-a-home">6 Interesting Ways Technology Can Help You Buy a Home</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing amortization schedule MMA mortgage mortgage acceleration mortgage loan Wed, 30 May 2007 19:03:47 +0000 Julie Rains 685 at http://www.wisebread.com How to Build Your Own Amortization Schedule http://www.wisebread.com/how-to-build-your-own-amortization-schedule-0 <p><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/wisebread_imce/couplereadyforproject.jpg" alt="project-ready couple" title="project-ready couple" width="225" height="336" align="top" /></p> <p>Looking for a dull, but financially eye-opening home project? Great! Today, we&#39;re going to build an amortization schedule. All the tools you need are: 1) an electronic spreadsheet with PMT (payment calculation), addition, subtraction, division, and multiplication capabilities (I use Excel) and 2) this guide. </p> <p>Let me go ahead and answer the questions you may have after reading this guide and completing your project:</p> <p>Hey, I have a 30-year fixed rate (6%) mortgage loan of $200,000, but why is my payment so much higher? <br />This schedule does not include amounts paid to escrow, such as homeowner&#39;s insurance and property taxes.</p> <p>Won&#39;t I have more equity built up over time?<br />For the purposes of this demonstration, equity is based on principal paid down; in real life, equity is calculated as the value of your home less the amount of outstanding loans (payoff amounts). </p> <p>Can I put my numbers (mortgage loan amount, interest rate, etc). in this spreadsheet and figure out my own mortgage amortization? <br />Yes, though you will need to make adjustments if you do not have a fixed rate loan. </p> <p>Where the heck is the PMT function? <br />In Excel, go to &quot;Insert,&quot; click on &quot;Function,&quot; select &quot;Financial&quot; from the categories, and then click on &quot;PMT.&quot; You can also click on that E-looking key on your tool bar. </p> <p>Why bother? <br />This guide is the first step in a series to show you how to pay down your mortgage faster than the original schedule (with a discussion of whether you should pay it down to follow in a subsequent post). It also mirrors an explanation given by UFirst in regard to its MMA (Money Merge Account) program (again, with further explanations in subsequent, equally intriguing posts), which a reader has asked about.</p> <p>So.... (the following information is also in the attached spreadsheet, which has the full schedule to Year 30, Month 360 -- <a href="/files/fruganomics/How_to_Build_Amortization_Schedule.xls">http://www.wisebread.com/files/fruganomics/How_to_Build_Amortization_Schedule.xls</a>)</p> <p><a href="/files/fruganomics/How_to_Build_Amoritization_Schedule.xls"></a> <p>Given the following: <br />Primary Mortgage $200,000 <br />Term in Years 30 (360 months) <br />Annual Interest Rate 6.00% (.50%/month or .005/month) </p> <p>Payment $1,199.10 PMT(6%/12,360,-200000,0,0) <br />Annual Interest Rate/Number of Months in a Year, Number of Payments, Mortgage Balance (note: don&#39;t use commas to separate thousands) <br />Value at the End of the Term, Payments Are Made at the End of the Month </p> <p>Build the Spreadsheet </p> <p>Enter Formulas into Spreadsheet in this Order</p> <p>Month 1 </p> <ul> <li> Balance= Primary Mortgage...1</li> <li> Payment= Payment (PMT)...2 </li> <li> Principal= Payment - Interest...4</li> <li> Interest= Balance x (Annual Interest Rate / Number of Months in a Year)...3</li> <li> Equity= Principal...5</li> <li> Total Interest= Interest...6</li> <li> Total Payments= Payment...7</li> </ul> <p> Months 2-360</p> <ul> <li> Balance= Prior Month&#39;s Balance - Principal...1</li> <li> Payment= Payment (PMT)...2</li> <li> Principal= Payment - Interest...4</li> <li> Interest= Balance x (Annual Interest Rate / Number of Months in a Year)...3</li> <li> Equity= Principal...5</li> <li> Total Interest= Total Interest from Prior Month + Interest from Current Month...6</li> <li> Total Payments= Total Payments from Prior Month + Payment from Current Month...7 </li> </ul> <p>Month Balance Payment Principal Interest Equity Total Int. Total Pmt<br />1 200,000.00 1,199.10 199.10 1,000.00 199.10 1,000.00 1,199.10<br />2 199,800.90 1,199.10 200.10 999.00 399.20 1,999.00 2,398.20<br />3 199,600.80 1,199.10 201.10 998.00 600.29 2,997.01 3,597.30<br />4 199,399.71 1,199.10 202.10 997.00 802.40 3,994.01 4,796.40<br />5 199,197.60 1,199.10 203.11 995.99 1,005.51 4,990.00 5,995.51<br />6 198,994.49 1,199.10 204.13 994.97 1,209.64 5,984.97 7,194.61<br />7 198,790.36 1,199.10 205.15 993.95 1,414.79 6,978.92 8,393.71<br />8 198,585.21 1,199.10 206.17 992.93 1,620.96 7,971.85 9,592.81<br />9 198,379.04 1,199.10 207.21 991.90 1,828.17 8,963.74 10,791.91<br />10 198,171.83 1,199.10 208.24 990.86 2,036.41 9,954.60 11,991.01<br />11 197,963.59 1,199.10 209.28 989.82 2,245.69 10,944.42 13,190.11<br />12 197,754.31 1,199.10 210.33 988.77 2,456.02 11,933.19 14,389.21</p> <p>13 197,543.98 1,199.10 211.38 987.72 2,667.40 12,920.91 15,588.31<br />14 197,332.60 1,199.10 212.44 986.66 2,879.84 13,907.57 16,787.41<br />15 197,120.16 1,199.10 213.50 985.60 3,093.34 14,893.17 17,986.52<br />16 196,906.66 1,199.10 214.57 984.53 3,307.91 15,877.71 19,185.62<br />17 196,692.09 1,199.10 215.64 983.46 3,523.55 16,861.17 20,384.72<br />18 196,476.45 1,199.10 216.72 982.38 3,740.27 17,843.55 21,583.82<br />19 196,259.73 1,199.10 217.80 981.30 3,958.07 18,824.85 22,782.92<br />20 196,041.93 1,199.10 218.89 980.21 4,176.96 19,805.06 23,982.02<br />21 195,823.04 1,199.10 219.99 979.12 4,396.95 20,784.17 25,181.12<br />22 195,603.05 1,199.10 221.09 978.02 4,618.04 21,762.19 26,380.22<br />23 195,381.96 1,199.10 222.19 976.91 4,840.23 22,739.10 27,579.32<br />24 195,159.77 1,199.10 223.30 975.80 5,063.53 23,714.90 28,778.43 </p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/julie-rains">Julie Rains</a> of <a href="http://www.wisebread.com/how-to-build-your-own-amortization-schedule-0">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/diy-mortgage-acceleration">DIY Mortgage Acceleration</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/speeding-through-your-mortgage-0">Speeding through your mortgage</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-keep-the-low-teaser-rate-for-your-mortgage">How to keep the low teaser rate for your mortgage</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-secrets-to-refinancing-an-underwater-mortgage">7 Secrets to Refinancing an Underwater Mortgage</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-interesting-ways-technology-can-help-you-buy-a-home">6 Interesting Ways Technology Can Help You Buy a Home</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing amortization amortization schedule interest MMA mortgage mortgage acceleration mortgage loan Sat, 26 May 2007 18:05:06 +0000 Julie Rains 683 at http://www.wisebread.com