Thursday, December 1, 2011

Compute Your Own Mortgage Payments

    Mortgage brokers and Realtors like to keep a shroud of mystery around computing mortgage payments.
It is simplest, easiest way is to buy yourself a Hewlett-Packard 10 -B calculator for thirty dollars.  I strongly suggest this. There is, no doubt, an app to put this on your phone.

    The second easiest way is to understand mortgage factors. 

    Very simply, a mortgage factor is the payment on one dollar for a period of time.

    The monthly mortgage factor for 5% for thirty years is .0053682.  That means if you borrowed one dollar and paid it back over thirty years, your payment would be about one half penny per month. If you borrowed $100,000, multiply that by .0053682.  Your payment would be $536.82. Multiply the factor times the mortgage amount.

    If you know the mortgage factor, you can compute mortgage payments.
                                       15 yrs                     30 yrs
    4%                               .0073723              .00475829
    4.5%                            .00762135            .00504792
    5%                               .0079079               .0053682
    5.5%                            .0081708               .0056779
    6%                                .0084386               .0059955
    6.5                                 .0087111               .0063207
   Just multiply the factor times the loan amount, there is your principal and interest payment

   If you need more details watch my You Tube video at climerschool or 407 822 3926

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