Posted on: 29th Dec, 2010 03:19 am
If I were to pay $50,000 on a $60,000 mortgage how would the amortization work on the remaining $10,000? Would the payments continue to be allocated the same as they were, large amount to interest and small amount to the principal?
it is always advisaible to repay some part if you have .
it will be benefitial in long run.
it will be benefitial in long run.
Unless you have an old "rule of 78s" mortgage (illegal now in most, if not all, states), interest is calculated (normally in arrears) on the prior month balance. P&I payment remains the same (unless an ARM or IO) but remainng term is reduced.
Amortization tables are only accurate at the start and without any changes. Any prepayment of any sort throws off the numbers for every subsequent payment.
Easiest answer: You'll keep paying the same amount monthly and you're loan will be gone very quickly. Since you'd owe about 1/6th as much interest every month, you'd see a huge increase in principal reduction every month.
I can post a table that approximates your "new" amortization schedule if you want. It's no hassle for me to do. I'd need interest rate, term (30, 15 years, etc.), original loan amount.
Have a good night,
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Chris Richter
Senior Mortgage Planner
Luett Mortgage Group, a production unit of Wintrust Mortgage
773-931-2424 - direct
crichter (at) luettmortgagegroup.com
http://www.luettmortgagegroup.com/
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Easiest answer: You'll keep paying the same amount monthly and you're loan will be gone very quickly. Since you'd owe about 1/6th as much interest every month, you'd see a huge increase in principal reduction every month.
I can post a table that approximates your "new" amortization schedule if you want. It's no hassle for me to do. I'd need interest rate, term (30, 15 years, etc.), original loan amount.
Have a good night,
------------------
Chris Richter
Senior Mortgage Planner
Luett Mortgage Group, a production unit of Wintrust Mortgage
773-931-2424 - direct
crichter (at) luettmortgagegroup.com
http://www.luettmortgagegroup.com/
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