If you have borrowed any loan from the bank, certainly you might have an idea about the amortization schedule. The amortization schedule is a statement of the loan which you have borrowed from the bank. The schedule will let you know about the status of the loan, the principal, the repayment amount. The frequency of the repayment, amount left for the payment and the due date of the payment as well. A complete schedule will let you know the time frame within which your borrowed principal will be zero.
How handy an amortization schedule is:
If you have an amortization schedule tool on your hand, you will be able to know the duration of the loan for which you will pay. As you are aware of the repayments and the number of repayments, you can plan your financial goal accordingly. As the schedule will enable you to know the monthly repayment amount, you can judge yourself that whether you can pay the installment monthly or not.
Fixed rate amortizing loans: Under this amortization schedule, the rate of the interest and the principal will remain same throughout the tenure of the loan. As a result of which the installment value will also remain same for the whole repayment period and so as the interest. The most advantageous of the fixed rate amortizing loans is the stability of the installment amount irrespective of the fluctuation in the property tax or the property insurance. Yes, there will be fluctuation and variation on the property tax and the property insurance. However it will not have any effect on the mortgage installment.
Contents of the amortization schedule: Till now you might have aware about the objective and purpose of the amortization schedule. The content of the amortization schedule will give you the exact idea about the complete list of the months and the year of each payment you’ll make for your mortgage loan. At the same time the schedule will also enable you to know the sum total of the money you have paid towards the interest of the mortgage loan. Interest in addition to the principal amount will give you the total amount which you have to pay for your loan. Once you paid your monthly installment the principal amount will be reduced and from the schedule you can know about the total outstanding and the amount to be paid.
The online amortization schedule: In order to get your amortization schedule, you can take the aid of the internet. Getting the amortization schedule tool from the internet is not a tough job at all. Moreover the tool is very simple to operate and it does not require any extra operational software to run it. All you need to do is to, download the application and feed the desired value as required by the tool. On a single click the complete details of the installment, interest and the duration of the repayment will be on your hand.
The amortization has somewhat resemblance to the deprecation. The only difference among them is the type of loan. The deprecation is related to the fixed and common asset where as the amortization is related to the home loan. To be simpler the amortization is the sum total of the interest and the principal to be paid for the home loan. Under the method of accounting the amortization is calculated over the period of tenure under which the repayment will be done for the home loan. However in case of the deprecation the deprecation value will be calculated according to the life of the asset.
The concept of the mortgage amortization is more relevant in the real estate sector. In general practice the real estate industry keep mortgage the house and tale loan from the bank. The mortgage house will be amortized and the repayment of the installment will be executed according to the term and condition. As you start paying the installment the principal value of the mortgage will be reduced. However it is very important to calculate the exact amount of the amortization and the amortization calculator does the same.
What is amortization calculator: The amortization is a simple tool used to calculate the installment or the periodic amount to be paid for a loan on the process of amortization. Once you have the calculator with you, all you need to put the purpose of the loan, amount of the loan, tenure of the repayment of the loan, rate of interest, location and the start date from which you will pay the repayment. The calculator will enable you the amount to be paid for the loan.
How to calculate: In order to calculate the annuity for the repayment the formula is
A = Amount to be paid over the period
P = Total principal subscribed for the loan
I = Rate of interest for the loan
n = The duration of the loan repayment over which you will repay the loan
Why amortization calculator: The designer of the amortization has designed the calculator in such a user friendly ways the you will be able calculate the amortization amount in no time. It will ask you a few piece of relevant information and the amortization will be ready with you. Moreover the amortization calculator is easily available over the internet which you can download and use for your purpose.
How the amortization calculator is useful: If you are planning to buy a new house with a loan, it is always recommended to have a amortization calculator with you. With the aid of the calculator you will be able to know the exact price you have to pay for your dream house. At the same time it will also enable you to segregate the amount which you have paid towards the interest and the principal. From the amortization calculator you will also be able to get the statement of the total repayment done towards your house.