Interest = P&I x 12 = annual payment x # loan years = total P&I; then total P&I – loan amount = total interest paid. So, $679 P&I x 12 = $8,148 annual payment x 30 years = $244,440 total P&I - $120,000 loan amount = $124,440 total interest paid.

The equitable right of redemption gives the borrower the right to clear up the debt prior to the foreclosure sale. After the foreclosure sale has taken place, the statutory right of redemption gives the borrower a certain amount of time to clear the debt.

If the proceeds from the foreclosure sale are not sufficient to cover the debt, the lender can go to court and seek a deficiency judgment against the borrower that places a general lien against all of the borrower's assets.

The rule of thumb is that 8 discount points are required to increase the percentage yield by 1%, so the lender will want to charge 8 points to increase the yield on investment.

In a mortgage, there are two parties involved while a deed of trust has three involved parties with the trustee holding the legal title and right to foreclose.

First determine the annual amount of interest paid based on the loan balance: $150,000 x 7.5% = $11,250 annual interest ÷ 12 months = $937.50 monthly interest. $987 monthly P&I payment - $937.50 monthly interest = $49.50 monthly principal payment. $150,000 original loan - $49.50 first month payment = $149,950.50 after one payment. Use same process with new balance as loan amount to determine balance after second month payment = $149,900.70.