The RetrieverTraining.Net Forums The Retriever Academy
Total Retriever Training with Mike Lardy
Hawkeye Media Gunners Up Tritronics Outdoor Media
Page 1 of 2 12 LastLast
Results 1 to 10 of 11

Thread: GDG mortgages....someone help me prove my point.

  1. #1
    Banned
    Join Date
    Jan 2003
    Location
    Pac NW
    Posts
    3,790

    Default GDG mortgages....someone help me prove my point.

    Here is the situation:

    $500,000 mortgage at 6.25% over 30 years (360 months).

    Payment due on the 1st of the month. If the payment is not paid on the first (lets say the people pay on the 15th) how much additional interest is paid each day they are late.

    WRL

  2. #2
    Senior Member Sean H's Avatar
    Join Date
    Feb 2008
    Location
    Richmond, TX
    Posts
    400

    Default

    How many years into the mortgage are we? If it was the first payment of the 360, they would only be paying $474 in principle and $2604 in interest. So the only difference would be that they would have to pay interest on the $474 for how ever many days they are late. The difference in the interest paid the next month is only $3 ($2601 compared to $2604), so even if you wait until the next month to pay, the additional amount of interest paid would be $3 (you still have to pay that months payment as well).
    Last edited by Sean H; 06-04-2008 at 03:03 PM.

  3. #3
    Banned
    Join Date
    Jan 2003
    Location
    Pac NW
    Posts
    3,790

    Default

    Quote Originally Posted by Sean H View Post
    How many years into the mortgage are we? If it was the first payment of the 360, they would only be paying $474 in principle and $2604 in interest. So the only difference would be that they would have to pay interest on the $474 for how ever many days they are late. The difference in the interest paid the next month is only $3 ($2601 compared to $2604), so even if you wait until the next month to pay, the additional amount of interest paid would be $3 (you still have to pay that months payment as well).
    Would they not still have to pay interest on the now accrued interest?

    WRL

  4. #4
    Senior Member Lesa Cozens Dauphin's Avatar
    Join Date
    Sep 2005
    Location
    NW Tarrant County TX
    Posts
    737

    Default

    It depends on how the loan paperwork was drawn up. And how late they are. Paying interest on the interest creates all sorts of issues with the IRS and how you account for it.

    lesa c
    Ramblin Maxx Retrievers

  5. #5
    Senior Member Sean H's Avatar
    Join Date
    Feb 2008
    Location
    Richmond, TX
    Posts
    400

    Default

    I'm not sure. Even if you did, then for the whole month it would still be less than $20.

  6. #6
    Senior Member blakegober's Avatar
    Join Date
    Apr 2008
    Location
    Ringgold, GA
    Posts
    167

    Default

    normally there is a 10 day "grace" period. You are still considered late after the first day of the month. But there are no adverse affects until the 10th. A late fee would be assessed on the 11th, which is normally 5% of the total payment amount. That is a one time fee for the month and that is the only late fee you will get. Everday after the 10th that you pay the per diem interest you pay starting the 11th is calculated at 6.25% of the outstanding principle balance. For Example:

    say you owe 500,000 on the principle of the loan, and your first payment is due May 1st, that means your daily interest in dollars and cents is $86.80 (roughly) ,everyday you accrue this much in interest.

    If the person made their payment on June 1st, as required their daily rate is recalculated on the new principle balance of $499,525.58, their new per diem is $86.72

    this means that the payment due in June lowers the per diem by only $0.08. So if you paid on the 15th you would owe 5% of the payment amount as a late fee ($153.92) and you cost your self about $1.20 in interest b/c you have to pay at the per diem rate of the month of May. Hope that made sense, its hard to explain in writing. I am a commerical loan officer and that is they way a commercial loan would work, I think a residiential mortgage should be about the same. NOne of that takes in to account Tax and Insurance if they are setup for escrow.
    Blake E. Gober
    Ringgold, Ga
    North Georgia HRC
    HR Hudson B. Gober JH
    Blakegober@gmail.com

  7. #7
    Banned
    Join Date
    Jan 2003
    Location
    Pac NW
    Posts
    3,790

    Default

    ok thanks.....that answers my question.

    WRL

  8. #8
    Senior Member tshuntin's Avatar
    Join Date
    Mar 2003
    Location
    Ogden, Utah
    Posts
    1,098

    Default

    Lee, did you win the bet?
    TRAVIS SKEEN

  9. #9
    Senior Member J Hoggatt's Avatar
    Join Date
    Jun 2004
    Location
    Grand Island, NE.
    Posts
    329

    Talking

    --------------------------------------------------------------------------------

    If it is a home mortgage- 99.9% of them

    Payment due on the 1st - late on the 16th.
    no late fees or penalties for 15 days.
    But interest still accrues on a 360/360 basis for mortgages.


    FYI:
    3 types of Interest Method Calc.:

    1. Exact - 365/365 ( most consumer type credit - car, boats etc)
    2. Mortgage 360/360 ( home loan etc..)
    3. Banker Interest (commercial lending) 360/365

    Haven't put a FC of AFC on a dog - but-----Now you are playing MY GAME.
    Attributed to Ben Franklin-
    "Don't Argue with Stupid People..... They will drag you down to their level and then beat you with experience!"

    "When you are dead, you don't know that you are dead. It is difficult only for the others. It is the same when you are stupid."

    "Arguing with Idiots is like playing chess with a pigeon..... No matter how good you are, the bird is going to sh$t on the board and strut around like it won anyway."

  10. #10
    Senior Member DarrinGreene's Avatar
    Join Date
    Feb 2007
    Location
    Souf Joisy
    Posts
    2,850

    Default

    A mortgage is a simple interest loan. The answer to your question is $0 as long as it's paid by the next payment date.

    You will run into a fee at 15 days 99.9% of the time but there is no daily interest accrual or compounding on a simple interest loan.


    If you go past the next payment date, I believe the interest from teh previous period would be added on to your principal balance and thus you would compund monthly, however I'm not even sure that is the case.

    The only time per diem interest applies on a mortgage is if you're paying it off in full mid month.

    I spent 5 yrs in mtg and now do unsecured lines with daily compound interest. They are two completely different animals.
    Darrin Greene

Similar Threads

  1. Counter Point to - I thought golden owners were bad... GDG
    By rcoorough in forum RTF - Retriever Training Forum
    Replies: 4
    Last Post: 03-28-2009, 09:47 AM
  2. So what's the point
    By Bruce MacPherson in forum RTF - Retriever Training Forum
    Replies: 10
    Last Post: 03-16-2009, 05:03 PM
  3. NAACP sues banks over sub prime mortgages
    By Bob Gutermuth in forum POTUS Place - For those who talk Politics in the Gallery!
    Replies: 19
    Last Post: 03-15-2009, 08:53 AM
  4. a point to ponder (political GDG)
    By Sundown49 aka Otey B in forum RTF - Retriever Training Forum
    Replies: 26
    Last Post: 05-20-2008, 10:56 AM
  5. Whats the point ??
    By Steve Amrein in forum RTF - Retriever Training Forum
    Replies: 11
    Last Post: 03-27-2007, 02:09 PM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •