Interest Calculation

[S T]

I need assistance in calculating the interest on a Home Improvement Loan - I have used CFS Tax Tools various modules and I can not arrive at the scheduled interest and principal that has been provided (This is that HERO Loan in California where they assess the annual loan repayment through the Annual Property Tax Bill which is fiscal year July 1 through June 30) paid in two installments. First due date is 11/1/2015 delinquent by 12/10/2015 - Second due date is 2/1/2016 delinquent 4/10/2016

Financed amount = $ 26,000
Interest Rate = 8.2%
Term 10 years
Total Payment = 4,488.40 plus an Annual Adminstrative Fee of $ 35 = total $ 4,523.40

Orig application date 7/24/2014 - Funding Date 11/12/2014

Annual Payment commencing 12/10/2015

First Year Interest $ 2,447.51 - Princ - $ 2,040.89

Would someone please provide me a formula/calculation on how they arrived at the Interest and Princ for the 1st year payment

Thanks

Sandy

[TAXNJ]

Have

I need assistance in calculating the interest on a Home Improvement Loan - I have used CFS Tax Tools various modules and I can not arrive at the scheduled interest and principal that has been provided (This is that HERO Loan in California where they assess the annual loan repayment through the Annual Property Tax Bill which is fiscal year July 1 through June 30) paid in two installments. First due date is 11/1/2015 delinquent by 12/10/2015 - Second due date is 2/1/2016 delinquent 4/10/2016

Financed amount = $ 26,000
Interest Rate = 8.2%
Term 10 years
Total Payment = 4,488.40 plus an Annual Adminstrative Fee of $ 35 = total $ 4,523.40

Orig application date 7/24/2014 - Funding Date 11/12/2014

Annual Payment commencing 12/10/2015

First Year Interest $ 2,447.51 - Princ - $ 2,040.89

Would someone please provide me a formula/calculation on how they arrived at the Interest and Princ for the 1st year payment

Thanks

Sandy

Have you tried asking the client to get amort schedule from loan provider? Otherwise we charge Clients to provide them with an amort schedule due to high cost of our loan amort software program.

Though there might be some basic programs for free on the Internet

[taxea]

There are free amortization calculators on the internet. The yearly fee is added to the calculated yearly interest.

[S T]

TAXNJ and taxea --Well thanks for your thoughts, although not helpful.

I have utilized all of the CFS Tax Tool Modules for Loan Amortization that I have used for years, as well as several online Amortization calculations.

I just thought maybe someone could provide me with a formula to manually calculate

As stated I have the amortization schedules from the Calif Hero Loan, they just do not compute as stated, that is why I was asking. Must have something to do with the accrued interest between the funding date and the first annual payment date and dates between payments.

Taxea for your reference the $ 35 administrative fee is NOT included in the interest, it is a separate item.

Sandy

[taxea]

The only other suggestion I have is to go to the source with your question. Sorry we couldn't help

[TAXNJ]

Interesting

TAXNJ and taxea --Well thanks for your thoughts, although not helpful.

I have utilized all of the CFS Tax Tool Modules for Loan Amortization that I have used for years, as well as several online Amortization calculations.

I just thought maybe someone could provide me with a formula to manually calculate

As stated I have the amortization schedules from the Calif Hero Loan, they just do not compute as stated, that is why I was asking. Must have something to do with the accrued interest between the funding date and the first annual payment date and dates between payments.

Taxea for your reference the $ 35 administrative fee is NOT included in the interest, it is a separate item.

Sandy

As originally suggested, did client ask lender for amortization schedule for year in question?

You may find as you mention "Must have something to do with the accrued interest between the funding date and the first annual payment date and dates between payments." to be the answer and the lender would provide it to you.

Why spend the time trying to figure it out when the Lender must provide it to your client.

Look forward to the answer you receive.

[Earl]

Interest

Possibly interest is compounded monthly and payment made yearly.
Worked out roughly at only 3 decimal points to around $2440.

[Roland Slugg]

If you have the P&I breakdown already, why is it necessary to have an amortization schedule? Just use the interest figure provided.

[S T]

Possibly interest is compounded monthly and payment made yearly.
Worked out roughly at only 3 decimal points to around $2440.

Thanks Earl,
At least you came closer than I did using different amortization modules

Would you share at how you arrived

The caculations I used produced less than the $ 2,447 by around $ 300 - $ 400. I had used daily at 360 and 365 - annual payment and had tried a few different start dates and payment due dates.

I know I can use the payment amortization schedule, but the Calif Hero Loan is "ugly" and was cross-checking, as I have some explanations that I have to provide to the taxpayers. Taxpayers were totally mislead on the tax issue reporting. Just a convenient loan for the taxpayer with no money down. Well if it sounds too good to be true, guess what!

Unfortunately as in my other post on the Calif Hero Loan (and it just not Calif) these Homeowners/Taxpayers are going to be living with this loan for a while and more will be "dumped" on the Homeowner when they try to refinance or sell.

Thanks for your post - I really appreciate it

Sandy

[TAXNJ]

Who

Thanks Earl,
At least you came closer than I did using different amortization modules

Would you share at how you arrived

The caculations I used produced less than the $ 2,447 by around $ 300 - $ 400. I had used daily at 360 and 365 - annual payment and had tried a few different start dates and payment due dates.

I know I can use the payment amortization schedule, but the Calif Hero Loan is "ugly" and was cross-checking, as I have some explanations that I have to provide to the taxpayers. Taxpayers were totally mislead on the tax issue reporting. Just a convenient loan for the taxpayer with no money down. Well if it sounds too good to be true, guess what!

Unfortunately as in my other post on the Calif Hero Loan (and it just not Calif) these Homeowners/Taxpayers are going to be living with this loan for a while and more will be "dumped" on the Homeowner when they try to refinance or sell.

Thanks for your post - I really appreciate it

Sandy

Who is responsible ?

When you say "more will be "dumped" on the Homeowner", would this be a violation of the Truth in Lending Act (TILA) of 1968 or did the client not read the lending agreement?

Has the Lender been contacted regarding the "dumping" issue or was it part of the agreement?

Seems you have done a lot of effort to try to get results but have not heard what the Lender's side of the agreement is, but if one thinks it's "dumping" rather than what is in the signed agreement, it maybe an issue.

Interesting to know what you find out.

[Earl]

Interest

I used monthly compounding of .6833333 for 13 months.