Unpaid Principal Balance (UPB)???

[Sue Bishop]

Hi,

Would someone plz confirm if the current unpaid principal balance is calculated as follows or otherwise?

Note is $30,000 - $1,158.04 (which is payments of $289.51 per month x 4 payments made) = an UBP of $28,841.96 at or on 4 July.

Thanks in advance

[Dion DePaoli]

Sue,

On the boards it is best to share the full set of note information so as to reduce speculation or lessen the amount of variables those trying to help have to solve to get you what you are looking for.

To recap the loan you are discussing:
Original Loan Amount = $30,000
Interest Rate = 10.00%
Amortization Term = 240 Months
Principal & Interest Payment = $289.51

After 4 periods:
Total Sum of Payments = $1,158.04
Total Sum of Interest Paid = $998.03
Total Sum of Principal Paid = $160.01

Balance Remaining after 4 Periods = $29,839.99

To calculate the balance by hand:
1. Find the period (monthly) interest (Loan Amount x Interest / 12) = (3,000/12 = 250)
2.  Subtract period interest from monthly P&I payment to give first month principal (289.51-250 = 39.51)
3.  Subtract period principal from loan balance = (30,000-39.51=29,960.17)
4.  To find amounts later in the amortization repeat steps 1 through 3 using the loan balance reduced by the principal from the prior period.

Period 2 Principal payment = 39.83
Period 3 Principal payment = 40.17
Period 4 Principal payment = 40.50 - Balance Remaining $29,839.99

For the sake of being complete if you so wish to find the P&I Payment for the loan that formula is:
= P [ R (1 + R ) ^ N) / (1 + R) ^ N – 1)]
Where: P=Principal; R=Rate; N=Periods

As a matter of mentioning, loans in the real world can and do have payments which are not applied to loan balances in time and accept principal payments less than what is due.  These situations can obviously make it hard to reconcile a balance.  If you are analysing a loan for purchase the seller of the loan and/or their mortgage servicing company should be able to provide you with a detailed accounting of payments and how they are or are not being applied to a borrower's account.