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Mortgage

Mortgage. Purpose. Can be used to purchase and improve real estate Can also be used for any other purpose for which the property owner is willing to encumber their real property by using it as collateral. Variables. Loan Principal Loan Term Quoted Interest Rate Discount Points

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Mortgage

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  1. Mortgage

  2. Purpose • Can be used to purchase and improve real estate • Can also be used for any other purpose for which the property owner is willing to encumber their real property by using it as collateral

  3. Variables • Loan Principal • Loan Term • Quoted Interest Rate • Discount Points • Origination Fee

  4. Loan Principal • Total sum of money borrowed

  5. Loan Term • The amount of time set by the lender for a buyer to pay a mortgage • Most conventional loans have 15 or 30-year terms

  6. Quoted Interest Rate • The rate at which your loan will be charged for interest

  7. Discount Points • A form of pre-paid interest • One point equals one percent of the loan • Borrowers can offer to pay a lender points as a method to reduce the interest rate on the loan, thus obtaining a lower monthly payment

  8. Origination Fee • An up-front fee charged by a lender for processing a new loan application • Quoted as a percentage of the total loan

  9. Initial loan amount, monthly repayment, monthly interest rate, and EAIR should be calculated automatically. Loan principal, loan term (years), quoted interest rate, discount points, and origination fee should all be inputted by the user, that can be found in the mortgage plan.

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