mortdata3 wrote:
- quote -

I suspect you are trying to understand how banks apply payments to a
mortgage. I understand that curiosity, and looked at this some years
ago. For a standard mortgage, most banks have a payment due on the first
of the month which would pay the mortgage off in a fixed number of
months, say 360. If you make payments a few weeks early, you will see no
change from the calculable amortization table you can easily look up or
request from the bank. Nor, if you make the payment on the last day of
the grace period, will you owe money at the end, when if you think about
it, one payment 15 days late every cycle, has the compound effect
of you having this money an extra 15 years over the entire period.
The only way to change that final due date is to make extra principal
payments spelled out as such.

My current mortgage is actually a fixed rate 15 year home equity loan,
used as my first mortgage. This loan has a monthly amount due, but it
calculates interest daily. Even without prepaying principal, by paying a
few payments ahead, I saw the balance drop, as credit was made on the
account the day I made those extra payments. If I pay a year ahead, it's
the equivalent of earning my mortgage rate as interest in the bank, and
I have no payment due for the next year. By being one year ahead, I've
lessened my need for emergency money at money market rates, although
we've just reached the point where the rate on MM funds is equal to the
mortgage.

JOE

If you have a loan where the interest is either calculated or
compounded *daily*, I would appreciate it if you would send
me certain loan data (specified below). I am trying to intuit
the various ways that lenders might implement this paradigm.

Send the data to mortdata3 "at" hotmail.com. If you are
skittish about revealing your email address, set up a free
account at hotmail.com or mail.yahoo.com, for example.

The data I would like (as much as you can provide) are for
a period or series of periods with the *same* interest rate:

1. Loan balance before the period or series of periods.
2. Number of remaining periods.
3. Payment frequency (monthly, biweekly, semi-monthly, etc).
4. Amount of payment.
5. Jurisdiction (US, UK, Canada, etc).
6. Stated annual interest rate. *Not* the APR, if you are given two
rates.
7. Daily interest rate, if stated. *Not* the APR, if you are given
two rates.
8. The following information from *each* of one or more
periodic statements: beginning and ending dates,
beginning and ending balance, amount of payment,
amount of interest.

I do not expect to write back to you. But if it is okay for
me to do so (to request clarification), please indicate that.

Many thanks.

(And thanks to the moderator for allowing me to post this here.
Feel free to truncate any discussion.)

Disclaimers: I am an individual, not a broker or employee of a
lender. The information you provide is for my personal use only.
It will not be shared, and it will not be used for commercial purposes.