This calculator will estimate the mortgage balance owed at the end of the initial payment term when the loan payment has been calculated on a longer term in order to make the payment more affordable in the near term.
Purchase Money Balance Calculator
There are several ways that the real estate industry has engineered to make it possible for would be homeowners to afford their home of their dreams now, even if they cannot pay for it in full for many years. One of these routes is the potentially long term mortgage, in which homeowners make the initial purchase with whatever cash that they have on hand to spare, and then complete the final payment and thus fully amortize the loan years from that time when they have the funds.
The longer term mortgage in this scenario might be split up into two or even three phases. The initial payment period, which may have one APR, might last for five or ten years over which the borrower pays small amounts to cover the interest or principal and interest of the loan, depending on what category of mortgage the loan falls into. During the secondary or final payment period, once the start up fees are accounted for, the borrower may wish to set an appropriate payoff goal or desired monthly payment sum in order to keep things nicely on target to amortize the loan by the end of its life term (which might be as much as ten or twenty years).
Of course, it is essential to the success of this kind of mortgage that the initial term and the final term balance each other out well so that neither the homeowner nor the broker cuts their losses. The borrower must be willing to accept larger payments over a longer number of years in order to compensate for their ability to get that initial period of small payments to make the loan affordable in the first place. This is very similar to a mortgage refinancing scenario, in which payments are made smaller and stretched out over a longer term to became affordable to the borrower.
Longer Term Mortgage Payments: A Win Win
In situations like these, the borrower benefits because they have the chance to save up a stockpile of cash and pay off their mortgage principal very gradually over a long and drawn out period of time. Consequently, the lender benefits because they have the ability to keep the loan for this lengthy term, thus charging the borrower interest and gaining financially from that aspect.
The purchase money mortgage calculator will do all the hard work for you so that you can see the numbers crunched just as they would be in this kind of near and long term mortgage. At the close of your initial payment term it will show you exactly how much the remaining balance is on your mortgage. Given the figure of your anticipated monthly mortgage payments and the number of years before the loan is payable in full, the tool can provide you with a standard principal and interest amortization schedule.
This balance sheet will help you view the decrease of the balance of your mortgage over time with the initial pay period and final pay period taken into account. You may view what your billable remainder is on a month to month basis in order to plan ahead to pay off your loan in the agreed upon time span.