 Sam
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Joined: 21 May 2005
Posts: 281
Location: CALIFORNIA
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 Posted: Fri Jul 09, 2004 11:51 am Post subject: Simple Interest Mortgage |
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Simple Interest Mortgage refers to that mortgage, which comprises of daily calculation of borrowers rate of interest, depending upon the principal balance at the time of last payment.
Features Of Simple Interest Mortgage:
- Benefit of early payment - A borrower has a benefit of early mortgage payments since it is not credited on the due date.
- High Interest Rate-A borrower is required to pay very high rate of interest on the amount due, unless he/she systematically make his/her monthly payments before the due date.
- Daily interest calculation- Here, the interest rate calculation is done on the daily basis to obtain the interest due for the day.
- Computation Method- In this type, the interest is computed on the unpaid principal balance of home, as opposed to compounded interest.
- Subject To Penalty- Here, borrowers pay interest/penalty for every day they are late. There is no facility for grace period.
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