Five years ago, you bought a house for $151,000, with a downpayment of $30,000 which meant you took out a $121,000 loan. Your interest rate was 5.75% fixed. You would like to pay more on your loan. You check your bank statement and find the following information. Escrow payment $211.13 Principle and interest payment $706.12 Total payment $917.25 current loan balance $112,242.47 How much would you need to add to your monthly payment to pay off your loan in 20 years instead of 25

To find out how much you would need to add to your monthly payment to pay off your loan in 20 years instead of 25, there are a few steps you can follow:

Step 1: Determine the remaining time on your current loan term. Since you originally took out a 25-year loan and now you want to pay it off in 20 years, you have 5 years remaining on your loan term.

Step 2: Calculate the number of monthly payments you need to make in the remaining 5 years. Since there are 12 months in a year, you would make a total of 5 * 12 = 60 monthly payments.

Step 3: Calculate the remaining principal balance on your loan. According to your bank statement, the current loan balance is $112,242.47.

Step 4: Find the monthly interest rate on your loan. The annual interest rate is 5.75%. Divide it by 100 and then by 12 to get the monthly interest rate.
Monthly interest rate = 5.75% / (100 * 12) = 0.00479167

Step 5: Use a loan amortization formula to calculate the additional amount you need to add to your monthly payment to pay off the loan in the new timeframe. The loan amortization formula is:

Additional monthly payment = (Current loan balance) / [(1 - (1 + Monthly interest rate)^(-Number of monthly payments))] / Monthly Payments

Additional monthly payment = $112,242.47 / [(1 - (1 + 0.00479167)^(-60))] / 60 = $66.99 (approximately)

Therefore, you would need to add approximately $66.99 to your monthly payment in order to pay off your loan in 20 years instead of 25.

To calculate the additional amount you would need to add to your monthly payment to pay off your loan in 20 years instead of 25, we need to compare the two loan scenarios.

Here's how you can do it:

1. Determine the remaining loan term for your current loan: Since you initially took out a 25-year loan, and you are currently five years into the loan, the remaining loan term is 25 - 5 = 20 years.

2. Calculate the total number of monthly payments for the remaining loan term: Multiply the remaining loan term (in years) by 12, which gives you 20 * 12 = 240 months.

3. Calculate the new monthly payment amount for the 20-year scenario: In this case, you want to pay off the loan in 20 years instead of 25. So, divide the current loan balance ($112,242.47) by the total number of monthly payments (240) to find the new monthly payment amount.

New Monthly Payment = Current Loan Balance / Total Number of Monthly Payments

New Monthly Payment = $112,242.47 / 240

4. Find the additional amount needed to pay off the loan in 20 years: Subtract the current principle and interest payment ($706.12) from the new monthly payment amount calculated in the previous step.

Additional Amount = New Monthly Payment - Current Principle and Interest Payment

Once you perform these calculations, you will have the additional amount you need to add to your monthly payment to pay off your loan in 20 years instead of 25.