house loan principal

Question

House cost 176,000 but we are paying 10% down, so our loan is for 158,400. is the interest rate is 6.75%. how much principle will we be paying in making our 4th payment .

Answer 1

You need to have an amortization table for the loan. You also need to know what is the length of the loan.

 

Based on that, a schedule is developed to make regular fixed monthly payments. At the beginning of the loan, this monthly payment will consist of two parts:

Paying the interest charged for the month, and the rest will be

Reduction of the PRINCIPAL (or balance owed).

 

Note the correct spelling of Principal. Most of the early payments goes to defraying interest; the outstanding balance gradually lowers as time goes on, so that the interest is less and a greater share of the fixed payment goes to reduction of the outstanding balance.

 

Your bank/loan company can provide you with an amortization table.