# how do i find the present value of a mortgage loan?

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4 Comments
1. Reply
VampireDog
May 16, 2011 at 3:10 am

excel actually has a formula for finding present value, and there explanation and example is pretty good.

2. Reply
Sean Roberts
May 16, 2011 at 3:40 am

If by present value, you mean how much you owe right now, there are a couple of ways to do it.The easiest way would be to call the mortgage company and ask them to send you an amortization schedule showing the payments, how much was applied to interest, and how much was applied to principle reduction.

The second way is to go to a mortgage loan calculator on the internet and enter the amount of your loan, the number of years, and the interest rate. Remember that monthly payment on the calculators excludes escrow for taxes and insurance.

The formula is interest = principle * interest rate * time. This means that if you missed a payment, the time becomes longer, and thus the amount interest you owe increases.

The third way is to do it on Excel.
Take the yearly interest rate * principle / 12 to get the monthly interest rate. Subtract this figure from your monthly payment excluding escrow. Remember that this is based making your payments on time each month.

If this is confusing, I can build a spreadsheet for you if you provide your principle, the number of months of the loan, the interest rate, and the date of the first payment. Unfortunately, Yahoo will not allow me to attach an Excel spreadsheet, so I would need an E mail address which allows an attachment. I answer a large number of questions, so you’ll need to refresh my memory about this issue.

While Excel has a built in present value function, I found that it is not always accurate, because of all the assumptions the programmers built into the function.

Sean

3. Reply
!!!
May 16, 2011 at 3:48 am

Call the lender.

4. Reply
I_think\$
May 16, 2011 at 4:45 am

To expand on Vampire’s comment: you need to know the Number of monthly payments left (usually 360 – already made, for a 30 yr loan), your monthly interest rate (yrly/12) and your monthly mortgage exclusive of taxes, insurances, etc. Then find/use a Present ‘value function in Excel or on a business calculator to learn of the raw payoff balance (before bank fees, etc).

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