Dec 162017

An very good loan analysis program. | |||
---|---|---|---|

File Name | File Size | Zip Size | Zip Type |

LOANS.DOC | 31275 | 8724 | deflated |

LOANS.EXE | 124128 | 40092 | deflated |

REGISTER.TXT | 1460 | 463 | deflated |

# Download File LOANSAV2.ZIP Here

## Contents of the LOANS.DOC file

Loan Saver Program User Manual

SHAREWARE:

This program is distributed as shareware. You may make copies of

the archived file and distribute them to your friends and neighbors.

All that we ask is that all program and text files be distributed

including the REGISTER.TXT file. If you find these programs useful and

wish to purchase the non-shareware versions you may do so by filling

out the registration form and sending the appropriate payment (check or

money order) to:

Simple Software Solutions

P.O. Box 1658

Lawrenceville, Georgia 30246

Please note that we continue to spend a great deal of time and effort

on this program. We are currently working with a licensed realtor on a

new, improved version of this program. Your registration would be a

great encouragement in this effort. Also, any suggestions for

improvement and comments will be greatly appreciated.

The following files should be included with the shareware package:

LOANS.DOC This file, the program documentation.

LOANS.EXE The LoanSaver program.

Introduction:

The Loan Saver program is written with the home buyer or mortgagee in

mind to:

1. Help the buyer obtain the best loan terms possible.

2. Help the buyer estimate the cash required to close on a real

estate purchase including financing.

3. Enable a mortgagee to look at existing loans and determine all

parameters concerning that loan.

4. Allow a mortgagee to find ways to save on interest payout by

prepaying on the principal in several different ways.

5. Enable a mortgagee to get the interest paid on a loan for any

given calendar year for tax purposes even if he/she has made

additional principal payments.

To accomplish all the above the LOANS program has fourteen calculation

options available from the main menu. The purpose of this manual is to

give a detailed explanation of each option available on the program. To

select any option at the main menu use the cursor arrow keys to move

the highlight bar to the desired option and press the Enter key. In

most cases a pop-up window will appear on the screen containing the

required input fields for that option. You simply type in the

appropriate values in the input fields and the result is displayed

immediately. Moving between input fields is accomplished by using the

cursor arrow keys or the Enter key. If you enter a value into an input

field and get to the end of that input field you will automatically go

to the next field. The options that concern amortization schedules

will clear the main menu screen and put the amortization achedule

headers on the screen. Any other departures from this mode of

operation will be described under the individual option heading.

Miscellaneous Calculations

Mortgage Qualifying Analysis:

Banks and mortgage companies have certain criteria for deciding

if an applicant for a loan is capable of making the payments.

This is based on their gross monthly income and the amount of

monthly debt payments they already have. Generally the monthly

loan payment cannot exceed a certain percentage of the applicants

gross salary less other debt payments. When you select this

option from the main menu a window will pop up on the screen with

input fields for gross monthly salary, monthly payments on

current debts, estimated real estate taxes and estimated

homeowners insurance payments. Two minimum payments are shown.

One uses the monthly payments on current debts and the other

doesn't. The percentages applied to the monthly income are

different for the two. When monthly payments on current debts

are included the percentage is 36 percent. When current debts

are excluded from the calculation 28 percent is used.

The result of this option will affect the Fixed Rate Mortgage

Payments and Adjustable Rate Mortgage Payments options. If the

maximum payments calculated from this option are less than what

is currently shown in the Mortgage Payments options, the amount

of the loan will be adjusted so that the payments will be equal

to or less than the maximum. Thus if you want to see how much

you can qualify to borrow set up the Mortgage Payments options

with very high loan amounts (with current interest rates and

desired term) and then select this option and calculate your

maximum monthly payments.

Estimated Closing Costs:

There are many ways to purchase and finance real estate but there

are some basic major categories that closing costs can fall

under. Closing costs are determined by adding the totals in

these six categories:

1. Down Payment

2. Financing Expenses

3. Prepaid Items

4. Escrow Items

5. Miscellaneous

6. Credits

Each of these categories has its own set of specific items. When

this option is chosen from the main menu a pop-up window opens

showing these six categories with totals and a total closing

cost. A highlight bar appears which can be moved with the cursor

arrow keys just like in the main menu. By moving the highlight

bar and pressing the Enter key you can choose an expense category

to change. When the Enter key is pressed another window pops up

listing all the cost items under the category with input fields

for you to input your particular expense item amounts. Running

totals are shown in each window. Pressing the Esc key closes the

current item window and takes you back to the category menu.

Also when you return to the category menu the category total and

total closing cost estimate is updated to reflect the new values

you have entered. Pressing the F1 key will cause the program to

print a full page closing cost estimate report with each cost

item individually listed under each category.

Closing cost items vary for any particular sales contract so some

of the items in this program will not be used and there may be

some that are not listed. Each item not used should have zeros

entered in the input field and items not listed should be placed

in the "Other" item on the detail windows. Some items are

estimated as a percentage of the purchase price or loan amount.

For these items you are given a choice of entering a percentage

and letting the program calculate the actual dollar amount or

entering the actual dollar amount directly and letting the

program calculate the percentage. A good example of this type of

item is the loan closing costs listed under the Financing

Expenses category. These costs are sometimes estimated as a

percentage of the loan amount or they may be just a flat

attorney's fee. You have the option of entering the percentage

or the exact amount of the attorney's fee.

Points vs Interest Rates:

It is sometimes desirable to pay what is called discount points

on a mortgage to reduce the interest rate. What this amounts to

is an up front payment of a percentage of the loan (sort of like

prepaid interest) which the mortgage lender requests for reducing

or "discounting" the annual percentage rate it charges for the

loan. Any lender can give you several different combinations of

interest rates and discount points it is willing to base its

loans on. This option allows you to compare the total points

plus interest for the life of a fixed rate loan.

When this option is selected from the main menu a window pops up

on the screen showing the total loan amount and term of the loan.

Then it also shows points, interest, totals and monthly payments

for two separate fixed rate loans. You may change the points and

interest rates for both loans and see which of the two is cheaper

over the entire life of the loan.

Adjustable Rate Mortgage Payments:

Adjustable rate mortgages, often referred to as ARM's,

generally have a starting percentage rate which is used to

calculate the first years monthly payments. There is a maximum

yearly increase in interest percent (usually around two percent)

and a lifetime cap on the interest rate. This option takes the

loan amount, beginning interest rate, maximum yearly increase,

the lifetime cap percentage and the loan term and calculates the

first year monthly payments, the second year monthly payments

(assuming an increase equal to the maximum yearly increase) and

the largest monthly payments (the cap). When this option is

chosen from the main menu a field input window that works the

same way as the fixed rate payments window will pop up. No

printout is available from this option.

ARM Amortization Schedule:

This option takes the information from the ARM Payment option and

calculates an amortization schedule of payments for the life of

the loan. Each payment is broken down to show the amount of

interest and principal paid by each payment, the cumulative

interest and the outstanding balance on the loan. This option

begins with the first year interest rate and increases the

interest rate by the maximum yearly increase each year until it

reaches the interest rate cap. The rest of the loan is amortized

at the cap interest rate. You are allowed to change the interest

rate and/or the monthly payment each year. Thus you can enter

the actual interest rate for each year and have the program

refigure the schedule.

When this option is chosen from the main menu the amortization

schedule screen is displayed. If the ARM payment option has not

been run yet the ARM payment calculation window will pop up

allowing you to make modifications if you wish. When you exit

this window the schedule is calculated and the first year is

displayed on the screen. You may move through the schedule one

year at a time by hitting the PgUp and PgDn keys (hitting the

PgUp key while the first year is displayed will cause the last

year of the schedule to be displayed). You may change the

current interest rate for the year being displayed by simply

typing over the interest rate displayed. The monthly payment

will be recalculated for the year and the entire amortization

schedule will be revised to reflect the new rate for that year.

You may also cursor over to the payment and change that if you

wish. Some adjustable rate mortgages will adjust the interest

every year but adjust the monthly payment only every five years

or somthing like that. You can simulate this by adjusting the

interest rate for the year and then changing the monthly payment

back to what it was before. You may get a printout of the

schedule by hitting the F1 key. Hitting Esc will return you to

the main menu.

Interest Paid in Tax Year:

This option displays your amortization schedule on a calendar

year basis showing the total interest paid for the calendar year.

You may page through the years using the PgUp and PgDn keys. A

printout of the entire amortization schedule showing the interest

paid each year is available by hitting the F1 key.

When this option is chosen from the main menu the amortization

schedule screen is displayed. If no amortization schedule has

been calculated a fixed rate amortization schedule will be

calculated. A small window will open on the screen asking for

the date the first payment was made. This is the first periodic

payment date, NOT the closing date on the loan. The printout

shows the exact date for each payment and prints the total

interest for the year after each December payment. The display

shows one calendar year at a time but does not show dates.

As mentioned above, the fixed rate amortization schedule will be

calculated at the start of this option if no amortization

schedule has been calculated yet. If any schedule has been

calculated no additional calculation is made. This has the

advantage of letting you print any schedule that has been

calculated including modified schedules. This enables you to

look at your tax deductions after your schedule has been

modified.

Fixed Rate Loan Calculations

Fixed Rate Mortgage Payments:

Mortgage payments can be calculated if you know the total loan

amount, periodic interest rate and term of the loan. This option

does this calculation. Interest rate is input on a yearly basis

which is usually how it is quoted. The term of the loan is in

years also. The periodic interest and term are converted to

months and the standard formula:

Payment = TotalLoan * i / (1 - (1 + i)^(-n))

Where i is the periodic interest (for a month) expressed as a

decimal ( 10% = .1 ) and n is the total number of payments (term)

on the loan. When this option is chosen from the main menu a

field input window pops up on the screen allowing input of total

amount of loan, yearly interest and term of loan in years. The

monthly payment is shown in the window and is automatically

updated each time an input field is changed. No printout is

available from this option.

Number of Payments for Loan:

Sometimes you may remember how much you borrowed, the interest

rate and the amount of the monthly payments but forget what

the term of the loan is. This option will calculate it for you.

This option uses another standard formula for finding the term:

n = -ln(1 - TotalLoan * (i / Payment)) / ln(1 + i)

Where n is the term and i is the periodic interest rate. The

ln( ) notations represent the natural logarithms of the result of

the expressions in side the parenthesis. Because of this you may

encounter certain combinations of parameters that will not be

accepted in the field input window. If this happens recheck what

is on the screen. What has happened is that one of the

expressions inside the ln parenthesis evaluates to a negative

value (you cannot take the logarithm of a value less than zero).

Usually you can get around this problem by inputting the values

in a different order.

Choosing this option from the main menu will cause a field input

window to pop up on the screen. No printout is available of this

option.

Balance after Kth Payment:

This option lets you find out how much you still owe on the loan

after K payments without having to calculate an entire

amortization schedule and look up payment number K. The

remaining balance is calculated using another standard formula:

Balance = Payment * ((1 - (1 + i)^(K - n)) / i

Where i is the periodic interest rate, n is the total number of

payments (term) and Payment is the amount of each payment. Note

that K must be less than n.

When you choose this option from the main menu a field input

window pops up allowing you to input the values for the

calculation. The balance is displayed on the screen and updated

each time you change an input value. No printout is available

for this option.

Loan Amount from Payment, Interest and Term:

Perhaps you are making payments on a loan and you know the

interest rate, payment amount and term but you have forgotten the

total amount of the loan. This option will find the total amount

of the loan for you. The formula used in this option is the same

one used to calculate the fixed rate payments resolved for

finding the loan amount instead of the payment.

When this option is chosen from the main menu a field input

window pops up allowing you to enter the values for payment,

interest and term. The loan amount is updated each time you

change one of the input items. No printout is available for this

option.

Amortization Schedule:

This option will take the result of the Fixed Rate Mortgage

Payment option and calculate an amortization schedule for the

entire life of the loan. Included in this schedule is a

breakdown of each payment showing how much of it is interest and

how much is paying the principal, a running total of the interest

paid on the loan and the amount of the principal remaining after

each payment.

When this option is chosen from the main menu the amortization

schedule screen is displayed. If the monthly payment option has

not been run yet the monthly payment calculation window will pop

up allowing you to make modifications if you wish. When you exit

this window the schedule is calculated and the first year is

displayed on the screen. You may move through the schedule one

year at a time by hitting the PgUp and PgDn keys (hitting the

PgUp key while the first year is displayed will cause the last

year of the schedule to be displayed). You may get a printout of

the schedule by hitting the F1 key. Hitting Esc will return you

to the main menu.

Amortization Modifications

There are a number of ways to save interest by paying extra on your

loans principal. These amortization modifications are a few ways to do

this in a relatively painless manner. If you elect to pay extra on

your principal be sure you talk to your lender first. Many loan

companies, when they receive a payment over the normal amount, will put

the extra into the escrow account (to pay taxes and insurance) unless

you specifically designate that the extra is to go to pay on the

principal. Be sure you and your lender agree that the extra will go to

your loan and not escrow before you send in your payment.

Accelerated Payment Schedule:

This option recalculates your amortization schedule based on

prepaying one year of principal payments each month for a

designated number of months at the beginning of the loan. Since

the principal paid per payments is very small at the beginning of

the payment schedule (you pay mostly interest at first) it does

not add a lot to the payment to pay several months principal at

first. This has the effect of reducing the term of the loan. If

you make your payment equal to the regular payment amount plus

the next twelve months principal payments you have reduced the

term of the loan by one year in one month!

When this option is chosen from the main menu the amortization

schedule screen appears. If the straight amortization schedule

has not been run the payment window will pop up. If all is ok

you can just hit the Escape key. A window will then pop up

asking how many years you wish to remove from your loan. The

modified amortization schedule will be calculated by adding

thirteen months principal plus the appropriate interest each

month for the number of months corresponding to the number of

years you wish to eliminate from the schedule. The screen

display will show you how much interest you will save by doing

this. You may print the resultant amortization schedule by

hitting the F1 key. Note: This option will not work with ARM

loans since you cannot reduce the term of an ARM loan by paying

extra on the principal.

Modify Individual Payments:

Suppose you receive a bonus from your company and want to use it

to pay an extra amount of principal on your mortgage. This

option will allow you to go through the entire amortization

schedule and modify any payment(s) you wish. The amount of

savings you will realize will be instantly displayed on the

screen. You can even make changes to individual payments on a

schedule that has been modified by one of the other methods in

this program!

When this option is chosen from the main menu the amortization

schedule screen appears with the current schedule displayed. The

cursor will appear at the first payment. If no schedule has been

calculated yet the payment calculation window will pop up first

giving you a chance to change any of the parameters before the

schedule is calculated. You may move the cursor to any payment

on the screen using the up and down arrow keys. When you get to

a particular payment you wish to change simply type in the new

amount and the amortization schedule will be recalculated and the

savings will be shown at the top of the screen in the header

information. You can use the PgUp and PgDn keys to display

the previous or next twelve month listing. When you are all done

you can print the entire schedule by hitting the F1 key. Note:

This option will work with either fixed rate or ARM loans.

Bi-Weekly Schedule (13 payments per year):

A popular method of saving interest on a mortgage is to pay half

a months payment at a time on a biweekly schedule. There are

many companies who specialize in setting you up with this type

schedule. This is great for people who are paid every two weeks

or every week instead of getting a monthly paycheck. The trick

is that there are 26 weeks in a year instead of 24 (twice twelve

months). So if you make biweekly payments you effectively make

thirteen payments a year instead of twelve. The thirteenth

payment pays off extra principal. The problem with this method

is that the loan company won't accept biweekly payments. It

still insists that it get that first of the month monthly

payment. Thus to work this system requires that you hold the

biweekly payments until a regular monthly payment is due.

Generally what the mortgage saver companies do is collect your

biweekly payments and put them into an escrow account from which

they pay your monthly payment to the original mortgage company.

When you have enough to make an extra payment (once a year) they

make a double payment to the mortgage company. For this service

they collect a fee. You can do exactly the same thing by

setting up your own bank account and paying into it on a biweekly

schedule. At the first of the month you take the amount of one

monthly payment and send it to the mortgage company. When your

account has an extra months payment in it you make a double

payment. This option will estimate the amount of interest you

will save by doing this.

When this option is chosen from the main menu the amortization

schedule screen appears. The payment calculation window will pop

up on the screen. A straight amortization schedule is calculated

before this option works. Thus if you run this option it will

wipe out any other saving option that may have been run

previously. The schedule is displayed and the savings is

displayed in the header information at the top of the screen.

Hitting F1 will print the schedule. Note that the biweekly

payment amount is displayed in the header information instead of

the monthly payment amount but the schedule is still monthly so

it shows the monthly payment amount. The schedule simply makes a

double payment every twelfth month. This schedule is the one the

mortgage company sees. This is a simple method of simulating the

effect of biweekly payments. Note: This option will not work

with ARM loans.

Increase Fixed Payments:

Monthly payments often do not come out in even dollars. Ever

wonder what you might save if you rounded up each monthly payment

to say the next hundred? That is what this option will give you.

For example, suppose your monthly payment comes out to be $742.24

and you feel you could just as easily pay $800 even per month.

You can estimate how much that increased payment will save you in

interest charges. One caution: Mortgage companies are not crazy

about getting payments that are only a few cents or dollars over

the scheduled payment. Some require that increased payments be

at least a minimum amount over the scheduled payment (like $100

or $200). Check with your mortgage company before trying this

one.

When this option is chosen from the main menu the amortization

schedule screen appears. The payment window will pop up giving

you a chance to change any of the parameters for the loan. Once

you Escape out of that window another window pops up asking for

the new monthly payment (must be larger than the normal payment)

and the first and last payment number you will make this

increased payment. Thus if you want to make increased payments

for only a year or two you can do this. Hitting Esc in this

window will pop off the window and calculate and display the new

amortization schedule. You can use the PgUp and PgDn keys to go

back and forward through the schedule and hitting the F1 key

will print the entire schedule. Note: This option will not work

with ARM loans.

Pay Extra into Savings for Payoff:

Perhaps you are a little wary of paying extra to the mortgage

company and would rather have control of the money. You could

pay into a savings account until the savings account balance

equalled the outstanding balance of the loan, then use the

savings to pay off the loan early. This option will calculate

this and show you when your savings will pay off your loan and,

of course, tell you how much money you will save.

When this option is chosen from the main menu the amortization

schedule screen appears. The payment window will pop up giving

you a chance to change any of the parameters for the loan. Once

you Escape out of that window another window pops up asking for

the amount you want to deposit monthly into the savings account

and the interest percentage that will be paid on the saving

account. When you finish putting in this information hitting Esc

will pop off that window and the program will calculate the

schedule and display it on the screen. You may use PgUp and PgDn

to go back and forward through the schedule. Hitting the F1 key

will print the entire schedule. Note: This option will work

with either fixed rate or adjustable rate loans.

Disclaimer and Warranty

The author of this program makes no claims as to the accuracy or

validity of this program under any specific situation. The LOANS

program is written to be used for estimates only. The program disk is

warranted to be free of physical defects. Simple Software Solutions

will replace any damaged or defective disk. To get a damaged or

defective program disk replaced return the original disk to Simple

Software Solutions, P.O. Box 1658, Lawrenceville, Georgia 30246.

Be sure to include your return address.

SHAREWARE:

This program is distributed as shareware. You may make copies of

the archived file and distribute them to your friends and neighbors.

All that we ask is that all program and text files be distributed

including the REGISTER.TXT file. If you find these programs useful and

wish to purchase the non-shareware versions you may do so by filling

out the registration form and sending the appropriate payment (check or

money order) to:

Simple Software Solutions

P.O. Box 1658

Lawrenceville, Georgia 30246

Please note that we continue to spend a great deal of time and effort

on this program. We are currently working with a licensed realtor on a

new, improved version of this program. Your registration would be a

great encouragement in this effort. Also, any suggestions for

improvement and comments will be greatly appreciated.

The following files should be included with the shareware package:

LOANS.DOC This file, the program documentation.

LOANS.EXE The LoanSaver program.

Introduction:

The Loan Saver program is written with the home buyer or mortgagee in

mind to:

1. Help the buyer obtain the best loan terms possible.

2. Help the buyer estimate the cash required to close on a real

estate purchase including financing.

3. Enable a mortgagee to look at existing loans and determine all

parameters concerning that loan.

4. Allow a mortgagee to find ways to save on interest payout by

prepaying on the principal in several different ways.

5. Enable a mortgagee to get the interest paid on a loan for any

given calendar year for tax purposes even if he/she has made

additional principal payments.

To accomplish all the above the LOANS program has fourteen calculation

options available from the main menu. The purpose of this manual is to

give a detailed explanation of each option available on the program. To

select any option at the main menu use the cursor arrow keys to move

the highlight bar to the desired option and press the Enter key. In

most cases a pop-up window will appear on the screen containing the

required input fields for that option. You simply type in the

appropriate values in the input fields and the result is displayed

immediately. Moving between input fields is accomplished by using the

cursor arrow keys or the Enter key. If you enter a value into an input

field and get to the end of that input field you will automatically go

to the next field. The options that concern amortization schedules

will clear the main menu screen and put the amortization achedule

headers on the screen. Any other departures from this mode of

operation will be described under the individual option heading.

Miscellaneous Calculations

Mortgage Qualifying Analysis:

Banks and mortgage companies have certain criteria for deciding

if an applicant for a loan is capable of making the payments.

This is based on their gross monthly income and the amount of

monthly debt payments they already have. Generally the monthly

loan payment cannot exceed a certain percentage of the applicants

gross salary less other debt payments. When you select this

option from the main menu a window will pop up on the screen with

input fields for gross monthly salary, monthly payments on

current debts, estimated real estate taxes and estimated

homeowners insurance payments. Two minimum payments are shown.

One uses the monthly payments on current debts and the other

doesn't. The percentages applied to the monthly income are

different for the two. When monthly payments on current debts

are included the percentage is 36 percent. When current debts

are excluded from the calculation 28 percent is used.

The result of this option will affect the Fixed Rate Mortgage

Payments and Adjustable Rate Mortgage Payments options. If the

maximum payments calculated from this option are less than what

is currently shown in the Mortgage Payments options, the amount

of the loan will be adjusted so that the payments will be equal

to or less than the maximum. Thus if you want to see how much

you can qualify to borrow set up the Mortgage Payments options

with very high loan amounts (with current interest rates and

desired term) and then select this option and calculate your

maximum monthly payments.

Estimated Closing Costs:

There are many ways to purchase and finance real estate but there

are some basic major categories that closing costs can fall

under. Closing costs are determined by adding the totals in

these six categories:

1. Down Payment

2. Financing Expenses

3. Prepaid Items

4. Escrow Items

5. Miscellaneous

6. Credits

Each of these categories has its own set of specific items. When

this option is chosen from the main menu a pop-up window opens

showing these six categories with totals and a total closing

cost. A highlight bar appears which can be moved with the cursor

arrow keys just like in the main menu. By moving the highlight

bar and pressing the Enter key you can choose an expense category

to change. When the Enter key is pressed another window pops up

listing all the cost items under the category with input fields

for you to input your particular expense item amounts. Running

totals are shown in each window. Pressing the Esc key closes the

current item window and takes you back to the category menu.

Also when you return to the category menu the category total and

total closing cost estimate is updated to reflect the new values

you have entered. Pressing the F1 key will cause the program to

print a full page closing cost estimate report with each cost

item individually listed under each category.

Closing cost items vary for any particular sales contract so some

of the items in this program will not be used and there may be

some that are not listed. Each item not used should have zeros

entered in the input field and items not listed should be placed

in the "Other" item on the detail windows. Some items are

estimated as a percentage of the purchase price or loan amount.

For these items you are given a choice of entering a percentage

and letting the program calculate the actual dollar amount or

entering the actual dollar amount directly and letting the

program calculate the percentage. A good example of this type of

item is the loan closing costs listed under the Financing

Expenses category. These costs are sometimes estimated as a

percentage of the loan amount or they may be just a flat

attorney's fee. You have the option of entering the percentage

or the exact amount of the attorney's fee.

Points vs Interest Rates:

It is sometimes desirable to pay what is called discount points

on a mortgage to reduce the interest rate. What this amounts to

is an up front payment of a percentage of the loan (sort of like

prepaid interest) which the mortgage lender requests for reducing

or "discounting" the annual percentage rate it charges for the

loan. Any lender can give you several different combinations of

interest rates and discount points it is willing to base its

loans on. This option allows you to compare the total points

plus interest for the life of a fixed rate loan.

When this option is selected from the main menu a window pops up

on the screen showing the total loan amount and term of the loan.

Then it also shows points, interest, totals and monthly payments

for two separate fixed rate loans. You may change the points and

interest rates for both loans and see which of the two is cheaper

over the entire life of the loan.

Adjustable Rate Mortgage Payments:

Adjustable rate mortgages, often referred to as ARM's,

generally have a starting percentage rate which is used to

calculate the first years monthly payments. There is a maximum

yearly increase in interest percent (usually around two percent)

and a lifetime cap on the interest rate. This option takes the

loan amount, beginning interest rate, maximum yearly increase,

the lifetime cap percentage and the loan term and calculates the

first year monthly payments, the second year monthly payments

(assuming an increase equal to the maximum yearly increase) and

the largest monthly payments (the cap). When this option is

chosen from the main menu a field input window that works the

same way as the fixed rate payments window will pop up. No

printout is available from this option.

ARM Amortization Schedule:

This option takes the information from the ARM Payment option and

calculates an amortization schedule of payments for the life of

the loan. Each payment is broken down to show the amount of

interest and principal paid by each payment, the cumulative

interest and the outstanding balance on the loan. This option

begins with the first year interest rate and increases the

interest rate by the maximum yearly increase each year until it

reaches the interest rate cap. The rest of the loan is amortized

at the cap interest rate. You are allowed to change the interest

rate and/or the monthly payment each year. Thus you can enter

the actual interest rate for each year and have the program

refigure the schedule.

When this option is chosen from the main menu the amortization

schedule screen is displayed. If the ARM payment option has not

been run yet the ARM payment calculation window will pop up

allowing you to make modifications if you wish. When you exit

this window the schedule is calculated and the first year is

displayed on the screen. You may move through the schedule one

year at a time by hitting the PgUp and PgDn keys (hitting the

PgUp key while the first year is displayed will cause the last

year of the schedule to be displayed). You may change the

current interest rate for the year being displayed by simply

typing over the interest rate displayed. The monthly payment

will be recalculated for the year and the entire amortization

schedule will be revised to reflect the new rate for that year.

You may also cursor over to the payment and change that if you

wish. Some adjustable rate mortgages will adjust the interest

every year but adjust the monthly payment only every five years

or somthing like that. You can simulate this by adjusting the

interest rate for the year and then changing the monthly payment

back to what it was before. You may get a printout of the

schedule by hitting the F1 key. Hitting Esc will return you to

the main menu.

Interest Paid in Tax Year:

This option displays your amortization schedule on a calendar

year basis showing the total interest paid for the calendar year.

You may page through the years using the PgUp and PgDn keys. A

printout of the entire amortization schedule showing the interest

paid each year is available by hitting the F1 key.

When this option is chosen from the main menu the amortization

schedule screen is displayed. If no amortization schedule has

been calculated a fixed rate amortization schedule will be

calculated. A small window will open on the screen asking for

the date the first payment was made. This is the first periodic

payment date, NOT the closing date on the loan. The printout

shows the exact date for each payment and prints the total

interest for the year after each December payment. The display

shows one calendar year at a time but does not show dates.

As mentioned above, the fixed rate amortization schedule will be

calculated at the start of this option if no amortization

schedule has been calculated yet. If any schedule has been

calculated no additional calculation is made. This has the

advantage of letting you print any schedule that has been

calculated including modified schedules. This enables you to

look at your tax deductions after your schedule has been

modified.

Fixed Rate Loan Calculations

Fixed Rate Mortgage Payments:

Mortgage payments can be calculated if you know the total loan

amount, periodic interest rate and term of the loan. This option

does this calculation. Interest rate is input on a yearly basis

which is usually how it is quoted. The term of the loan is in

years also. The periodic interest and term are converted to

months and the standard formula:

Payment = TotalLoan * i / (1 - (1 + i)^(-n))

Where i is the periodic interest (for a month) expressed as a

decimal ( 10% = .1 ) and n is the total number of payments (term)

on the loan. When this option is chosen from the main menu a

field input window pops up on the screen allowing input of total

amount of loan, yearly interest and term of loan in years. The

monthly payment is shown in the window and is automatically

updated each time an input field is changed. No printout is

available from this option.

Number of Payments for Loan:

Sometimes you may remember how much you borrowed, the interest

rate and the amount of the monthly payments but forget what

the term of the loan is. This option will calculate it for you.

This option uses another standard formula for finding the term:

n = -ln(1 - TotalLoan * (i / Payment)) / ln(1 + i)

Where n is the term and i is the periodic interest rate. The

ln( ) notations represent the natural logarithms of the result of

the expressions in side the parenthesis. Because of this you may

encounter certain combinations of parameters that will not be

accepted in the field input window. If this happens recheck what

is on the screen. What has happened is that one of the

expressions inside the ln parenthesis evaluates to a negative

value (you cannot take the logarithm of a value less than zero).

Usually you can get around this problem by inputting the values

in a different order.

Choosing this option from the main menu will cause a field input

window to pop up on the screen. No printout is available of this

option.

Balance after Kth Payment:

This option lets you find out how much you still owe on the loan

after K payments without having to calculate an entire

amortization schedule and look up payment number K. The

remaining balance is calculated using another standard formula:

Balance = Payment * ((1 - (1 + i)^(K - n)) / i

Where i is the periodic interest rate, n is the total number of

payments (term) and Payment is the amount of each payment. Note

that K must be less than n.

When you choose this option from the main menu a field input

window pops up allowing you to input the values for the

calculation. The balance is displayed on the screen and updated

each time you change an input value. No printout is available

for this option.

Loan Amount from Payment, Interest and Term:

Perhaps you are making payments on a loan and you know the

interest rate, payment amount and term but you have forgotten the

total amount of the loan. This option will find the total amount

of the loan for you. The formula used in this option is the same

one used to calculate the fixed rate payments resolved for

finding the loan amount instead of the payment.

When this option is chosen from the main menu a field input

window pops up allowing you to enter the values for payment,

interest and term. The loan amount is updated each time you

change one of the input items. No printout is available for this

option.

Amortization Schedule:

This option will take the result of the Fixed Rate Mortgage

Payment option and calculate an amortization schedule for the

entire life of the loan. Included in this schedule is a

breakdown of each payment showing how much of it is interest and

how much is paying the principal, a running total of the interest

paid on the loan and the amount of the principal remaining after

each payment.

When this option is chosen from the main menu the amortization

schedule screen is displayed. If the monthly payment option has

not been run yet the monthly payment calculation window will pop

up allowing you to make modifications if you wish. When you exit

this window the schedule is calculated and the first year is

displayed on the screen. You may move through the schedule one

year at a time by hitting the PgUp and PgDn keys (hitting the

PgUp key while the first year is displayed will cause the last

year of the schedule to be displayed). You may get a printout of

the schedule by hitting the F1 key. Hitting Esc will return you

to the main menu.

Amortization Modifications

There are a number of ways to save interest by paying extra on your

loans principal. These amortization modifications are a few ways to do

this in a relatively painless manner. If you elect to pay extra on

your principal be sure you talk to your lender first. Many loan

companies, when they receive a payment over the normal amount, will put

the extra into the escrow account (to pay taxes and insurance) unless

you specifically designate that the extra is to go to pay on the

principal. Be sure you and your lender agree that the extra will go to

your loan and not escrow before you send in your payment.

Accelerated Payment Schedule:

This option recalculates your amortization schedule based on

prepaying one year of principal payments each month for a

designated number of months at the beginning of the loan. Since

the principal paid per payments is very small at the beginning of

the payment schedule (you pay mostly interest at first) it does

not add a lot to the payment to pay several months principal at

first. This has the effect of reducing the term of the loan. If

you make your payment equal to the regular payment amount plus

the next twelve months principal payments you have reduced the

term of the loan by one year in one month!

When this option is chosen from the main menu the amortization

schedule screen appears. If the straight amortization schedule

has not been run the payment window will pop up. If all is ok

you can just hit the Escape key. A window will then pop up

asking how many years you wish to remove from your loan. The

modified amortization schedule will be calculated by adding

thirteen months principal plus the appropriate interest each

month for the number of months corresponding to the number of

years you wish to eliminate from the schedule. The screen

display will show you how much interest you will save by doing

this. You may print the resultant amortization schedule by

hitting the F1 key. Note: This option will not work with ARM

loans since you cannot reduce the term of an ARM loan by paying

extra on the principal.

Modify Individual Payments:

Suppose you receive a bonus from your company and want to use it

to pay an extra amount of principal on your mortgage. This

option will allow you to go through the entire amortization

schedule and modify any payment(s) you wish. The amount of

savings you will realize will be instantly displayed on the

screen. You can even make changes to individual payments on a

schedule that has been modified by one of the other methods in

this program!

When this option is chosen from the main menu the amortization

schedule screen appears with the current schedule displayed. The

cursor will appear at the first payment. If no schedule has been

calculated yet the payment calculation window will pop up first

giving you a chance to change any of the parameters before the

schedule is calculated. You may move the cursor to any payment

on the screen using the up and down arrow keys. When you get to

a particular payment you wish to change simply type in the new

amount and the amortization schedule will be recalculated and the

savings will be shown at the top of the screen in the header

information. You can use the PgUp and PgDn keys to display

the previous or next twelve month listing. When you are all done

you can print the entire schedule by hitting the F1 key. Note:

This option will work with either fixed rate or ARM loans.

Bi-Weekly Schedule (13 payments per year):

A popular method of saving interest on a mortgage is to pay half

a months payment at a time on a biweekly schedule. There are

many companies who specialize in setting you up with this type

schedule. This is great for people who are paid every two weeks

or every week instead of getting a monthly paycheck. The trick

is that there are 26 weeks in a year instead of 24 (twice twelve

months). So if you make biweekly payments you effectively make

thirteen payments a year instead of twelve. The thirteenth

payment pays off extra principal. The problem with this method

is that the loan company won't accept biweekly payments. It

still insists that it get that first of the month monthly

payment. Thus to work this system requires that you hold the

biweekly payments until a regular monthly payment is due.

Generally what the mortgage saver companies do is collect your

biweekly payments and put them into an escrow account from which

they pay your monthly payment to the original mortgage company.

When you have enough to make an extra payment (once a year) they

make a double payment to the mortgage company. For this service

they collect a fee. You can do exactly the same thing by

setting up your own bank account and paying into it on a biweekly

schedule. At the first of the month you take the amount of one

monthly payment and send it to the mortgage company. When your

account has an extra months payment in it you make a double

payment. This option will estimate the amount of interest you

will save by doing this.

When this option is chosen from the main menu the amortization

schedule screen appears. The payment calculation window will pop

up on the screen. A straight amortization schedule is calculated

before this option works. Thus if you run this option it will

wipe out any other saving option that may have been run

previously. The schedule is displayed and the savings is

displayed in the header information at the top of the screen.

Hitting F1 will print the schedule. Note that the biweekly

payment amount is displayed in the header information instead of

the monthly payment amount but the schedule is still monthly so

it shows the monthly payment amount. The schedule simply makes a

double payment every twelfth month. This schedule is the one the

mortgage company sees. This is a simple method of simulating the

effect of biweekly payments. Note: This option will not work

with ARM loans.

Increase Fixed Payments:

Monthly payments often do not come out in even dollars. Ever

wonder what you might save if you rounded up each monthly payment

to say the next hundred? That is what this option will give you.

For example, suppose your monthly payment comes out to be $742.24

and you feel you could just as easily pay $800 even per month.

You can estimate how much that increased payment will save you in

interest charges. One caution: Mortgage companies are not crazy

about getting payments that are only a few cents or dollars over

the scheduled payment. Some require that increased payments be

at least a minimum amount over the scheduled payment (like $100

or $200). Check with your mortgage company before trying this

one.

When this option is chosen from the main menu the amortization

schedule screen appears. The payment window will pop up giving

you a chance to change any of the parameters for the loan. Once

you Escape out of that window another window pops up asking for

the new monthly payment (must be larger than the normal payment)

and the first and last payment number you will make this

increased payment. Thus if you want to make increased payments

for only a year or two you can do this. Hitting Esc in this

window will pop off the window and calculate and display the new

amortization schedule. You can use the PgUp and PgDn keys to go

back and forward through the schedule and hitting the F1 key

will print the entire schedule. Note: This option will not work

with ARM loans.

Pay Extra into Savings for Payoff:

Perhaps you are a little wary of paying extra to the mortgage

company and would rather have control of the money. You could

pay into a savings account until the savings account balance

equalled the outstanding balance of the loan, then use the

savings to pay off the loan early. This option will calculate

this and show you when your savings will pay off your loan and,

of course, tell you how much money you will save.

When this option is chosen from the main menu the amortization

schedule screen appears. The payment window will pop up giving

you a chance to change any of the parameters for the loan. Once

you Escape out of that window another window pops up asking for

the amount you want to deposit monthly into the savings account

and the interest percentage that will be paid on the saving

account. When you finish putting in this information hitting Esc

will pop off that window and the program will calculate the

schedule and display it on the screen. You may use PgUp and PgDn

to go back and forward through the schedule. Hitting the F1 key

will print the entire schedule. Note: This option will work

with either fixed rate or adjustable rate loans.

Disclaimer and Warranty

The author of this program makes no claims as to the accuracy or

validity of this program under any specific situation. The LOANS

program is written to be used for estimates only. The program disk is

warranted to be free of physical defects. Simple Software Solutions

will replace any damaged or defective disk. To get a damaged or

defective program disk replaced return the original disk to Simple

Software Solutions, P.O. Box 1658, Lawrenceville, Georgia 30246.

Be sure to include your return address.

December 16, 2017
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