Notices
Results 1 to 6 of 6

Thread: Mortgage calculations

  1. #1 Mortgage calculations 
    sak
    sak is offline
    Forum Junior sak's Avatar
    Join Date
    Sep 2007
    Location
    Presently at ME
    Posts
    210
    What I want to consider is after obtaining a loan, we start pay back. There is interest added to principle amount then there is monthly pay back installments deducted from principle amount.
    Many web sites give calculation formulae but what about finding frequency of interest added to principal amount
    Formula to find interest rate (whether they give correct rate, again how do they consider interest added to principal amount frequency of interest is also a variable.)


    Reply With Quote  
     

  2.  
     

  3. #2 Re: Mortgage calculations 
    Suspended
    Join Date
    May 2008
    Posts
    330
    Quote Originally Posted by sak
    What I want to consider is after obtaining a loan, we start pay back. There is interest added to principle amount then there is monthly pay back installments deducted from principle amount.
    Many web sites give calculation formulae but what about finding frequency of interest added to principal amount
    Formula to find interest rate (whether they give correct rate, again how do they consider interest added to principal amount frequency of interest is also a variable.)

    Bit hard to comprehend what you are asking.
    "how do they consider interest added to principal amount" is that the question?
    No question mark obviously!!

    You have to find out how they do it, there are various methods, loads of em probably.
    They may also have 'special rules' about how part months are calculated etc...
    You really need to get their literature but tht may not have all the info in.
    There may be terms used such as APR etc and ariousu crap,it is not possible to give you an answer with out you provining all that info.


    Reply With Quote  
     

  4. #3 Re: Mortgage calculations 
    Suspended
    Join Date
    Apr 2007
    Location
    Pennsylvania
    Posts
    8,822
    Quote Originally Posted by sak
    What I want to consider is after obtaining a loan, we start pay back. There is interest added to principle amount then there is monthly pay back installments deducted from principle amount.
    Many web sites give calculation formulae but what about finding frequency of interest added to principal amount
    Formula to find interest rate (whether they give correct rate, again how do they consider interest added to principal amount frequency of interest is also a variable.)
    In the USA, the frequency of compounding, if not annual, has to be quoted in the equivalent "annual percentage rate" (APR). In this formula, the interest earned after one year is added to the principal. Interest may be compounded daily, continuously, or whatever, but will still be equivalent to some APR.
    Reply With Quote  
     

  5. #4  
    sak
    sak is offline
    Forum Junior sak's Avatar
    Join Date
    Sep 2007
    Location
    Presently at ME
    Posts
    210
    What i was looking for was http://en.wikipedia.org/wiki/Mortgage_calculator where i want solve the equation for r and n.
    Reply With Quote  
     

  6. #5  
    Suspended
    Join Date
    May 2008
    Posts
    330
    Quote Originally Posted by sak
    What i was looking for was http://en.wikipedia.org/wiki/Mortgage_calculator where i want solve the equation for r and n.
    Yes, I thik I have seen something like that before.

    But note it says "In the United Kingdom, the regulatory body (The FSA - Financial Services Authority) which regulate the lenders (banks & building societies) have not enforced their authority to standardise the calculation of mortgages. The general public and many mortgage professionals are unaware that each lender calculates mortgages in completely different ways. Many UK lenders have, over the years, changed their calculation methods. Some have changed their calculations several times and as lenders have merged with each other, calculation methods are changed"

    As I am in the UK, I perhaps asumed you were, but also different countries can use different methods.

    You might also want to read this about APR:-
    http://en.wikipedia.org/wiki/Annual_percentage_rate

    Note: "In the U.S. and the UK, lenders are required to disclose the APR before the loan (or credit application) is finalized (although the definition of "APR" is not the same in these two countries see below)."

    So it really is a bit of a minefield trying to find out what is what about mortages.

    I remember when I was trying to figure out what I could aford to pay or whatever but I used a fairly simple formula and a little computer program I wrote, I would jus put in a monthly payment aand see if it over shot the totaal or not, if it did I would amend it and run it again, it did't take many itereations to get a reasonably accurate figure. I forget what formula I used.

    Also I remember when I wanted to pay my mortage off early so I went in and asked them how much was out standing, the figure they gave me seemed too large, I asked them several times about it but eventually I just accepted the figure they gave me, but I didn't pay it all off because I wanted to leave a small amouont owing so they would have to look after the deeds for me. :wink:


    Anyhow it turns out that the figure they gave me was incorrectly large I had actually overpiad my mortage, the sent me a check for the excess of several hundred pounds some time later!! Swines!! (Thy probably only did this because
    they knew I was unhappy about the figure they gave me )

    At the time I was out of work and I wanted to reduce my payments but they said I had underpaid in the past (which was new to me!!) and they wanted to increase them considerable!!

    Anyway I had inherited some money so I just said rather smugly "Sod that! I will the lot off then - how much is outstanding?" (which meant they would not be making any profit onn it anymore ).

    So whilst you may have a formula there is a lot of other stuff you need to know.
    Reply With Quote  
     

  7. #6  
    sak
    sak is offline
    Forum Junior sak's Avatar
    Join Date
    Sep 2007
    Location
    Presently at ME
    Posts
    210
    Thanks for answers,
    I'm in a trouble similar to esbo described! however situation is in control. But I wana monitor the deal better, and the knowledge is even better.
    Reply With Quote  
     

Bookmarks
Bookmarks
Posting Permissions
  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •