Maria Center

Amortization charts can be daunting for many in the real estate industry, but they are a crucial tool for understanding loan payments and amounts.

This video offers insights on how to effectively use these charts.

Understanding Amortization Charts:

The video begins by emphasizing the importance of amortization charts in real estate transactions. These charts are often provided in testing centers and are essential tools for calculating mortgage payments and loan amounts. The tutorial covers two primary scenarios: determining the loan amount from a given payment and vice versa.

Scenario 1: Finding the Loan Amount:

The first scenario involves finding the loan amount based on a given monthly payment. Maria walks through an example where a client named Kathy makes a $950 monthly payment at a 5% interest rate on a 30-year fixed-rate, fully amortized loan. By using the chart to identify the payment per $1,000 borrowed and applying some basic math, the tutorial demonstrates how to calculate the total loan amount.

Scenario 2: Calculating the Monthly Payment:

The second part flips the scenario. Here, the challenge is to determine the monthly payment amount when the loan amount is known. Using a hypothetical loan of $225,000 with similar loan terms, Kandyce explains how to use the chart to find out the monthly payment by understanding the concept of payment per $1,000 borrowed and multiplying it by the total number of thousands in the loan amount.

Real-World Applications:

The video highlights that these calculations are not just for passing tests but are applicable in real-life situations, such as buying houses, cars, or boats with fully amortized loans. The tutorial emphasizes the importance of understanding these calculations to make informed financial decisions.

About the Author Maria Center

I began my career in real estate in Ohio in 2003 and currently work as a PrepAgent real estate exam tutor/instructor. 
I am licensed in Ohio, Florida, Alabama, Virginia, and Kentucky. I work as a Real Estate Broker at 1st Class Real Estate Expert Realtors in Philpot, Kentucky; Managing Broker at Renwick Realty in Middletown, Ohio; Associate Broker at 1st Class Real Estate Premier Homes in Ashland, Virginia; and as a broker in both Florida and Alabama. I am a licensed real estate instructor in Florida and teach finance and appraisal in Ohio. I look forward to helping you prep for success!

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