[GNC] Mortgage & Loan Repayment schedule tool

[Michael or Penny Novack]

Do not fault the tool if it does not agree with the bank. I have written 
these things. There are simply too many assumption about how to do the 
calculation, where to round off, etc. << I ended up with a fancy version 
that allowed instructions where to adjust that could get agreement to a 
penny BUT it was not strictly speaking a "function" (a calculation) but 
a process using a repeated "trial and error" approach not unlike 
Newton's Method --- lenders frequently charge for an "amortization 
table" and I wanted to have that to be able to make additional payments 
of principle*.

As for escrow amount calculation, this is really tricky. The bank will 
set an amount to fund an amount that will not only be sufficient to pay 
the taxes and insurance bills over the year but will do so on a "cash 
flow" basis. In other words, the fund will always have enough in it to 
meet these bills when they are due. The bank will recalculate ever year 
but based on the dates of the expected bills will tend to fluctuate more 
wildly than you expect**. I never wrote one of these, but again, a good 
candidate for repeated "trial and error*"

Michael D Novack


* If the amount you send in is the exact amount of the principle portion 
of the following payment then you can cross that payment off -- in 
effect you are jumping closer to the end of the mortgage. Especially 
when interest rates are high, as they were at the time, in early years 
you can cheaply buy time off the end of the mortgage.

**( In other words, given an initial balance (in escrow) and making a 
series of payments at specified dates (the tax and insurance due dates 
and amounts) what is the least monthly input (or biweekly if that's what 
the mortgage payments are) that will prevent the escrow amount from 
going minus.)