"Herb Smith" <smithff33[at]aol.com> wrote:
- quote -


Total payment excluding escrow = total payment (excluding
escrow). Same difference.

The steps above describe how to calculate the mortgage
amortization. If you only know the amount of the mortgage
and the number of years, you would need to calculate the
present value of an annuity in the amount of the mortgage,
then divide 1 by the PVA. Mortgage payment = 1/PVA

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easytoremember123[at]email.com wrote:

- quote -

If you couldn't find the answer on the net, you need to
improve your search criteria. Here is your answer:
http://www.hughchou.org/calc/formula.html

P.S. The search criteria was: formula calculate mortgage payment

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joeu2004[at]hotmail.com wrote:

- quote -

In California a note including a balloon payment is required
to have certain disclosures. In the ones I've seen, they
deal with this item.

Stu

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Joe Btfsplk wrote:
- quote -

Sorry Joe, other than the fact that your response fails to
answer the OP's question on calculating mortgage payments,
your Step 2 above does not make mathematical sense. I think
you meant:

STEP 2. Total payment (excluding escrow) - monthly interest
(Step 1) = principal

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easytoremember123[at]email.com wrote:

- quote -

If the interest is compounded monthly, the mortgage payment can
be computed by:

PMT = PV * r / (1 - 1/((1 + r)^n))

where PV is the loan amount, n is the length of the loan in
months, and r is i/12, where i is the nominal annual
interest rate (not the APR). In Excel, it is simply
PMT(i/12, n,, -PV). The lender should always round __up__
PMT at least to cents to ensure that the last payment is no
more than the others -- unless the lender chooses to
disclose the difference.

I believe that is the formula that most online mortgage
calculators use.

If the interest is compounded daily (which is common these
days, I believe), the mortgage payment __should__ be
computed as above, but r is (1 + i/365)^(365/12) - 1. In
Excel: PMT((1 + i/365)^(365/12) - 1, n,, -LOAN). In Excel,
r can also be computed using FV(i/365, 365/12,, -1) - 1.

However, I cannot say if any lenders use the latter formulas
to determine the payment when interest is compounded daily.
Instead, the payment might still be determined by the
compounded-monthly formula, and the daily interest rate
might be as simple as i/365. Either or both can result in a
larger last payment, which I believe the lender would have
to disclose in the Reg Z statement (for US loans).

Even if the lender uses the more accurate compounded-daily
formula, the last payment is likely to be slightly higher --
at least in amortization tables that I have created. This
is because months contain 30, 31, 28 and 29 days, not 365/12
days.

Since I do not recall seeing disclosure of a balloon payment
in the conventional US mortgages that I have been involved
in directly or indirectly, I wonder if the lender is
prepared to simply eats the extra interest in the last
period (suprise!). Many mortgages are paid off before the
last scheduled payment anyway.

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"Bob Sandler" <bob_usenet[at]yahoo.com> wrote:

- quote -

STEP 1. Mortgage Balance X (annual int rate/12) = interest.
for one month.

STEP 2. Total payment excluding escrow X the monthly int rate
= principal.

STEP 3. Old mortgage balance minus principal = new mortg bal.

STEP 4. Same as step 1 but using new mort bal = interest for
the following month.

If the morgage is paid any way other than monthly, adapt the
interest to the fraction of a year the payment period
covers.

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- quote -

There seems to be some wrong with the above calculation,
Dick, as I was not able to make the mortgage payment
calculate out to the correct value. For many years I have
used the following formula to make such calculations, and
they are accurate and agree with commercial or online
calculators:

mp = bl * [ (mi) / (1 - (1 + mi) ^ -np) ]

For example, a $100,000 loan, at 6% (.06) annually for 30
years (360 months), results in a calculated payment of
$599.55 per month with my calculation. Of course, that is a
payment of PRINCIPAL and interest, but does not include
taxes, hazard insurance, or PMI.

Any rebuttal?

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- quote -

If only it were always that simple. About ten years ago I
had a mortgage where they used the daily interest rate (ir /
365) and calculated the interest portion of each payment
based on the current balance and the number of days between
the dates they actually received the payments. The remainder
of each payment was applied to principle.

So it seems to me that, while the concept is basically the
same for all mortgages, the details can vary.

Bob Sandler

Moderator:
What you had is commonly referred to a squirrelly mortgage.
They are prevalent in the mobile home market. The problem
is that the secondary market for such loans is very thin.


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I'm interested in knowing exactly how it is that mortgages
are calculated. The internet is no help because all search
attempts point to mortgage calculators, not the method of
mortgage calculating.

Moderator:
Read this carefully because we will have a test on it later.
(ir) is the interest rate you are paying.
(py) is the number of payments you make per year.
(mi) is your monthly interest rate = (ir / py).
(yr) is the number of years on your mortgage.
(np) is the total number of payments = (py * yr).
(cr) is the compounded interest rate = ((1 + mi) ^ np)
(bl) is the original balance of the mortgage.
(mp) is the principle and interest payment
= (bl * cr * ir) / (cr - 1)

Now add 1/12th of your property taxes and 1/12th of your
hazard insurance premium. If you have a pmi (private
mortgage insurance), add 1/12th of that too. Unless you
have a squirrely mortgage, this will put you within a
nickel of your monthly payment.

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