Simulating Loan Scenarios Before You Sign Anything

Before signing any loan agreement, I run at least five scenarios through a simulator. What happens if rates adjust? What if I lose my job for three months and defer payments? What if I refinance in year three? The monthly payment on the term sheet tells you one story. Simulation tells you all the others. Why a calculator is not enough A standard loan calculator answers one question: given a principal, rate, and term, what is the monthly payment? A simulator lets you model changes over time. Real loans are not static. Variable rates adjust. Borrowers make extra payments some months and skip others. Refinancing opportunities appear mid-term. Life happens. A simulator lets you model these realities before they become surprises. Variable rate simulation An adjustable-rate mortgage (ARM) starts with a fixed rate for 3, 5, 7, or 10 years, then adjusts periodically based on an index plus a margin. A 5/1 ARM adjusts annually after the first five years. function simulateARM ( principal , initia