![]() A balloon payment represents a balance due at the end of the loan term. Points (also called discount points or mortgage points) are a way for borrowers to reduce the overall interest rate by making an up-front payment one point equals one percent of the loan amount. Mortgage computations can also include additional features and variables. By adjusting loan amounts and interest rates as well as different down payment amounts, you can determine the size of mortgage you might be able to afford and calculate recurring costs over time. From these variables, Wolfram|Alpha can compute monthly payments, total interest charges and breakdowns of payments against the principal loan amount and interest over the life of the mortgage. The simplest mortgage calculation requires only a total loan amount, a loan period and the annual percentage rate of interest on the loan. Several different types (5/1, 1/1, 3/1, 7/1) of adjustable-rate mortgages and rate cap structures (5/2/5, 2/2/6, 2/2/5) are available to choose from. ![]() In a fixed-rate mortgage, the interest rate remains the same over the life of the loan in an adjustable-rate mortgage, the interest rate is typically fixed for some period of time, but then may fluctuate in response to changing market indices that influence interest rates. Understanding mortgage calculations Wolfram|Alpha can perform useful computations related to common mortgage types.
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