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The Monthly Amortization Schedule is a valuable tool for a Realtor or mortgage broker.
You have assisted your clients through the mortgage process and now is the time to furnish your clients with printed documentation of what they have agreed upon plus an opportunity to discuss and clarify exactly what is meant by the term Interest Adjustment Date (IAD).
The IAD is the date from which the lender will start collecting interest. Your clients’ regular payments will commence one payment period after this date. For example, if you have chosen to make monthly payments, your first payment will come due one month after the Interest Adjustment Date.
Be very conscious, however, about the number of days that exist between your clients’ purchase completion date (closing date) and the IAD (which will always be after the closing date) that they select. Your client is responsible for the interest assessed during this period and it becomes a closing cost.
EXAMPLES:
If the closing date is June 27 and the IAD is July 1 then
the Interest adjustment will be calculated on 4 days.
If the closing date is June 8 and the IAD is July 1 then the Interest adjustment will be calculated on 23 days.
The dollar value of an Interest Adjustment increases with the number of days. For many first time homebuyers the Interest Adjustment amount payable could seriously jeopardize their closing due to insufficient closing funds.
Enter the Mortgage Amount, Interest Rate (STATED ANNUAL RATE), AMORTIZATION, TERM and the (IAD) that your clients have selected.