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Author: jakeburns100 Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 127684  
Subject: calculating an interest only loan Date: 1/18/2003 3:37 PM
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I'm trying to figure out how much money we can save on a combo loan that we've just taken out (new home). The first (5/1 ARM) is an interest only loan for 10 years. I can't seem to find a spreadsheet that accommodates this "feature". I've looked at the Mortgage Prof's site and while there are lots of great tools there, I didn't see this one...I'd appreciate it if anyone out there could direct me to where I might find such a spreadsheet. In the meantime, I'll fire up Excel, but...thanks.--Jake
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Author: foo1bar Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 50370 of 127684
Subject: Re: calculating an interest only loan Date: 1/18/2003 4:27 PM
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I can't seem to find a spreadsheet that accommodates this "feature".

An interest-only loan is the easiest to roll your own spreadsheet for.

If you only pay interest (no extra payments) it's going to be 10 years of payments of I * P. (where I = interest rate, P = principal.)

If you don't do extra payments, you can figure out the first 10 years on a $5 calculator. ;)



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Author: jakeburns100 Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 50379 of 127684
Subject: Re: calculating an interest only loan Date: 1/18/2003 10:28 PM
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Well, I should have mentioned that I do want to make extra payments. I believe what I want would debit my principal each month by my "extra" payment, and then the next month, the interest only payment would be calculated based on the new principle. At the end of the interest only period (10 years), the loan would be amortized over the last 20 years. That is, the spreadsheet would then calculate a new monthly payment including interst and principle for the next 240 payment periods.

Anything like this around?--Jake


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Author: foo1bar Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 50382 of 127684
Subject: Re: calculating an interest only loan Date: 1/18/2003 11:05 PM
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At the end of the interest only period (10 years), the loan would be amortized over the last 20 years. That is, the spreadsheet would then calculate a new monthly payment including interst and principle for the next 240 payment periods.

At that point it's an adjustable, right?

My guess is it'll re-amoritize every time it adjusts.

Which makes it almost necessary to create your own spreadsheet because you dont' have an easily modeled situation that can be done in a few entry boxes on a web form.
The functions you'll probably want to look for are 'PPMT() IPMT() and PMT()' in Excel.

Good luck


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Author: Dwdonhoff Big gold star, 5000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 50386 of 127684
Subject: Re: calculating an interest only loan Date: 1/19/2003 4:16 PM
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Hi Jake,

Here's a place to download a very well developed Excel spreadsheet pre-programmed for just what you want to do.

A gift from Bill & the Dark Empire;
http://search.officeupdate.microsoft.com/TemplateGallery/ct139.asp

ALSO, btw, has some great pre-formatted letters for disputing credit errors and dealing with the credit bureaus.

Cheers,
Dave Donhoff
National Mortgage Broker/Banker

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