Berkeley CSUA MOTD:Entry 30619
Berkeley CSUA MOTD
2021/12/03 [General] UID:1000 Activity:popular

2004/6/4-5 [Finance/Banking] UID:30619 Activity:high
6/4     Loan experts. What are the difference between the two scenarios?
        1. borrow 100k at 6% for 30 years, pay off 50k immediately
        2. borrow 50k at 6% for 30 years.
        According to my loan program, I pay quite bit more in 1. but
        shouldn't the two be the same? ie, in 1, the interest also
        starts pretty much with 50k principle.. what causes the
        difference? Thanks.
        \_ Your 50k must be 50k of the principle--that is 50k + 1st month
           interest + same principle as loan 2.
        \_ As above says, but also make sure your loan doesn't have any
           pre-payment penalties and as they say make sure your 50k is going
           to principle, not interest.  Then it becomes the same.  Almost.
           You'll end up paying a few days interest on that 50k.
        \_ If this is a mortgage - like loan, some have origination
           "points" or fee structures based on the principal amount.
           nitpick: principal not principle.
2021/12/03 [General] UID:1000 Activity:popular

You may also be interested in these entries...
2013/8/29-11/7 [Finance/Banking] UID:54734 Activity:nil
8/29    Applying for a home loan now. The loan officer keeps asking why
        I wrote large amounts of check, and what they're for, and fax
        her proof to support what I said. She said loan regulations have
        tightened a lot to prevent money laundry. What is the max amount
        of money I can transfer these days without triggering annoying
        audits? I am not a terrorist.
2013/5/13-7/3 [Finance/Banking] UID:54676 Activity:nil
5/13    Does FDIC ever matter? How likely is it that your deposit of
        over $250k going to be screwed over in a major US bank?
        \_ Was Washington Mutual a major bank?
        \_ Was Washington Mutual a major US bank?
        \_ Hahahahahahahahahahaha. Good one.
        \- As with nuclear weapons, this insurance produces much of its value
2013/3/9-4/16 [Finance/Banking] UID:54621 Activity:nil
3/9     In a 15/30 year loan, the amount of payment stays the same but
        the payment on interest decreases while the principal increases.
        Suppose I decide to pay off a huge chunk of principal, will
        the amount of interest I need to pay decrease drastically, or
        do banks still want to take out a huge chunk of interest rate?
        \_ You don't actually have separate "interest" and "principal"; you
2009/11/21-30 [Finance/Banking] UID:53538 Activity:moderate
11/21   I'm trying to figure out how much I save. Does money I contribute
        to debt (student loans and car loan) considered money I "save"?
        \_ "I'm trying to figure out how healthy I am. I normally
           smoke 2 packs a day but now I've cut it down to just
           1 pack a day. Does the reduction count towards health
           that I hope to 'gain'?"
2009/2/19-25 [Finance/Banking] UID:52601 Activity:nil
        \_ Suppose you are a damn good executive.  Someone gives you the
           chance to come in to a ailing firm that has a long history and
           some serious pluses going for it.  If you manage to turn things
           around in a 5-10 year time frame you will be heralded as a
           brilliant mind and even the elite will treat you like royalty.