Mortgage Professor: Standard And Reverse Mortgage Guidance
Jack M.Guttentag is Professor of Finance Emeritus at the Wharton School of the University of Pennsylvania and author of The Mortgage Encyclopedia.Throughout his career, Professor Guttentag has been concerned with the difficulties faced by consumers in the home loan market.
Actived: Sunday Feb 21, 2021
Mortgage Formulas - The Mortgage Professor
On a cash-out refinance, the APR ignores the existing mortgage that is paid off, which makes it a poor guide to the decision (see The APR on a Cash-Out Refinance). The better guide is a "net-cash APR", in which the balance of the existing loan (including interest accrued to the day of payoff) is subtracted from the left side of the equation
How Does Simple Interest Work? - The Mortgage Professor
With a simple interest mortgage at 6%, he pays off 101 days later than the standard mortgage and pays $1328 more interest. At 12%, he pays off 466 days later and pays $15,137 more interest. Penalties for payment after the grace period work the same way on both types of mortgage. For this reason, I have not included penalties in the calculations.