Loan Warrior Amortization Program The LoanWarrior (LW) is a basic tool used in calculating loan characteristics. One of the most popular uses of amortization programs is to provide the user a quick look at the loan schedule of potential home mortgage payment schedules. In practice, however, LW can be used for any type of amortizing problem. The dictionary defines the term "amortize" as : 1. To liquidate (a debt) by installment payments or payment into a sinking fund. While there are other types of uses for amortization schedules, the following documentation is intended to be used in terms of this definition. Running Loan Warrior : LW will run on any IBM PC/XT/AT or compatible with 128K memory available. Two different modules are available, Fixed and Variable. These are accessed from the Main Menu. The Main Menu is accessed directly from the disc with the command 'STARTLW2'. LW is not copy protected, and therfore may be transfered easily to fixed disc by copying all of the files on the disc. LoanWarrior Available Options : The following is a description of each menu in LW, presented in the order the menus appear. (1) Start Menu : From here you can run LW with or without an existing data file. If you choose an existing data file, a list of files available is shown; you must enter one of these file names with the proper extension. If you choose to run LW without an existing file, a dummy file is input for you to edit. (2) Input Definition Menu : Four variables define the loan - interest rate (percent), term (years), initial principle ($), and compounding period (year or month). You may edit one or all of these from this menu. (3) Accelerated Principle Payments : If you choose this option, you can put money toward added principle payment, above the scheduled fixed payment. This money goes directly toward reducing the principle, and thus reduces the term of the loan and the final total interest paid. This is useful to determine the effect of regular added payments and/or lump sum payments on the life of the loan. To use this option, you will be asked to input interest rates for any given block of periods you specify, with the "last year" being input for all remaining periods. For example, if you have an adjustable rate mortgage, with interest increasing from 7%, one percent per year for 3 years: LW Prompt enter: first period to be changed : 2 last year to be changed : 4 interest for period 2 : 8 interest for period 3 : 9 interest for period 4 : 10 Note that the rate for all periods after 4 will be 10 also. (4) Variable Interest Rate (only on Variable module) : The interest rate applied to each period can be specified with this option. This is useful in determining the effect of ARM's (adjustable rate mortgages) on the loan schedule. Input data the same way you did in (3). (5) Report Destination : You may designate your printer or monitor as the output device. (6) Specify Output Period : In a given analysis, you may designate one specific block of periods you wish to view/print. This is helpful when you have, for example, a 30 year loan and are using monthly analysis (360 periods), and only wish to see the 15th year (months 180 to 192). Input 180 as start and 192 as finish. When using the accelerated principle option with this, you may inadvertantly specify a period that only partially exists, or doesn't exist at all because your additional payments pay the loan off sooner than you think. If the first period you specify exists, but the loan ends somewhere in between, you will just be shown the final period. If the first period does not exist, you will immediately get just the final period, with no report header. (7) Report Format : You may designate either a Summary (only inputs, calculated payment per period and total interest paid) or Detailed (loan status per period; principle payment, interest payment, total interest paid to date, principle remaining) reports. A detailed report on a long term loan with monthly compounding will produce a very large amount of data. (See (6) to help with this problem) (8) Saving a Data File : After the reports are processed, you will be asked if you wish to leave the program, return to the main menu, or save the current data. If you choose to save the data, you will be asked to input a file name (up to 8 characters) with thr proper extension (.FIX or .VAR, depending which module you are in). Note that option 3 is the only difference between the Fixed and Variable LoanWarrior Modules; in all other repects they run in the same way. Good Luck!