Loan Toolkit FAQ's

• Why do you have adjustments to the payment and principal for Loans?
• Why do I need to enter a loan amount and remaining balance on loans?
• Why does the Current Loan information change when I enter a Pre-pay amount?
• Why does entering planned prepayment on a mortgage increase the projected equity?

Why do you have adjustments to the payment and principal for Loans?

In most cases you will not need to use the total adjustments we provide, however banks do have different methods for calculating remaining balances. Simple Home Finances toolkits cannot handle all possible methods so:

1) on the Loan Management software we have added Adjust Loan Balance fields for every payment to make an adjustment if you need to

2) On the Mortgage Management software we have added an Adjust Principal field at the beginning of each year of the loan to make an adjustment if you need to

3) Banks have different ways to calculate your payment so on both Loan Management and Mortgage Management we have added a field to adjust your payment. In most cases this adjustment will be a penny either up or down.

The amount put in these adjustment fields can be negative or positive, but should only be used to get your balance to match your banks.

Why do I need to enter a loan amount and remaining balance on loans?

If you are setting up a new loan you should enter the same amount in the loan amount and remaining balance.

If you are setting up a loan that you have already made payments too then putting in an accurate remaining balance is very, very important because the only way to get your loan in sync with your bank is to start with the same remaining balance your lender has. The remaining balance is not an approximate number or guess it is exactly what your lender shows as your current remaining balance. If this is wrong then all the related projections will be wrong.

Most lenders provide this type of information right on their website or you can call them to get this number, make sure the number reflects the last payment you made to the lender.

Why does the Current Loan information change when I enter a Pre-pay amount?

The Current Loan information shows you your current payment including any planned pre-payment, the total cost of the loan considering any planned pre-payment and the number of months of payments remaining considering planned pre-payment.

If you don't enter a pre-payment amount these numbers represent your current loan only. The pre-payment is added so that when you compare a New Loan's information to it, you can see what impact prepaying may have and it could help you determine to prepay on your current loan instead of refinancing your loan.

Why does entering planned prepayment on a mortgage increase the projected equity?

This toolkit is designed for both managing and planning the payoff of your mortgage. Prepayment is a very powerful tool in planning the payoff of a mortgage. Most people can payoff their mortgage quicker and increase their equity faster by prepaying than by using any other method. So we use the prepayment in projecting the savings in money and time as well as the projected increase in equity you would gain if you did make a prepayment on your mortgage.

This prepayment will also default into the 'Added Principal' field when you go to make a payment but you can change it or delete it from your payment if you choose.