THE SCENARIO:
I put $100,000 down and borrowed $350,000 to buy a house awhile back. The mortgage amortizes fully over 30 years, has monthly payments, and the rate is 6.625%.
I still owe $338.465.83.
a) What's my mortgage payment (Principal and Interest)?
b) How long have I been paying on the mortgage?
Sadly, my Aunt Matilda passed away awhile back, and she left me a nice inheritance. After the dust settled, I was left with $100,000 that I want to use to pay down my mortgage balance (note, this is not a refinance or recast of the loan).
If I pay $100,000 on my mortgage today,
c) what's my new payment?
d) how much time does this extra payment shave off my loan?
e) how much interest does this payment save me over the remaining life of my loan?
THE SOLUTION:
Whew, that's a lot. Let's go through it step by step.
Set up the problem this w... Read more...