[Home] || Payment Schedule | Summary |
||||||||||||||||||
APR Calculation -- new feature
|
Example 1: You borrowed a loan of $120,000. The financing charge is 2 percentage points plus other costs of $2,500. The term is 30 years and the interest rate is 7.125%. The mortgage insurance cost is 0.25%. You try to take the advantage from the interest deductible for your tax. You estimated you can payoff the remaining balance at the end of 10 year period (assuming no early payments penalties). Now, what is your effective interest rate? It is not 7.125% as you expect. You want the effective interest rate as low as possible. What if another lender give you a different offer? You cannot compare solely from the interest rate. Using this professional loan calculator you will find out: What a big difference if ........ |
Lenders: | Don't tell your potential borrowers that you use this tool. Generate a dozen scenarios as your bargain strategies. Pick the highest APR. That is your rate of return from lending money to your borrowers. |
Borrowers: | Use this tool to get the lowest effective APR from different offers. You need to know the balance between points and interest rate. Try to think about the advantage of early payments and the effects of the mortgage insurance payments. |
Consultants: | Tell your customers that you are using this software and show them your calculations from the Summary Report. |