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TimeValue Software Blog

Forbearance and Restructuring Loans

By Martel Pellerin

Forbearance is a hot term in finance today. Forbearance is an agreement where the lender delays its right to exercise foreclosure if the borrower can either catch up to its payment schedule by a certain time or agree to extend the term of the loan. The key for the borrower is to get some relief due to financial difficulties. The key to the lender is to keep their customer in the property, give them some relief, and keep their yield on the loan. How this is done can make a significant impact on either party.

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Imputed Interest Rate

By Martel Pellerin

The imputed interest rate is an unstated interest rate and it can cover many different scenarios. To calculate an imputed interest rate, you need to input the actual cash flows and then you can solve for the interest rate.

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Settlement Offers

By Martel Pellerin

If you are considering a settlement offer or if you want to pay off a settlement, you want to find out how much it is worth today. To do this, you need to calculate the present value, because the lump sum of your settlement’s value is going to be worth less in the future than it is today. When you have a claim to see how much money you would accept or pay today, a simple present value calculation is the answer.

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Bi-Weekly vs Half Month Mortgage Payments

By Martel Pellerin

Occasionally a customer asks whether making half monthly payments instead of monthly payments will pay off their mortgage quicker.  The answer is no.   Let’s assume a 30-year loan. You will only save part of one month’s interest over the 30 years so it is probably not worth it and this is assuming that your bank will process your partial half month payments timely.

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Using Zero Payments for Accruals

By Martel Pellerin

Often, we have no activity on a loan or an investment but we want to know the amount of interest that is accruing or compounding. You can trigger the interest to appear by adding events such as a Payment or Invest for a $0 amount. This causes TValue to calculate the interest and, depending on the compute method, either add it to the principal if you are using Normal (compound interest) or to the accrued interest balance if you are using US Rule (simple interest).

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