# without using a mortgage calc. but with a regular calc. how do u calc arm rates?

Deal Score0

FOR INSTANCE DO I TAKE THE AMOUNT OF THE LOAN (150,000)AND DIVIDE BY THE INTEREST SAY 6%. AND THEN MULTIPLY BY THE TERM OF THE LOAN SAY 30 YEARS. iS THAT THE WAY TO DO IT WITHOUT USING A MORGAGE CACULATORAND HAVING TO USE A REAL ONE?

I have a 30 yr lined up, don’t know the interest rate off top of my head. I was curious if anyone was a mortgage broker and could give advice. Its a 100% loan with seller concession included.

brian-the-brain
February 1, 2011 at 2:50 pm

You can’t unless you have a lot of time on your hands. The reason a mortgage calculator, or financial calculator, were created is that the money needs to be itteratively multiplied by each interest period as it is moved through the months. So asking what is a \$ 500 monthly payment one year from now worth assuming 6% interest, is not simply taking 12×500. You have to calculate the interest for each month. This simple problem takes 12 multiplications and additions all in a row. It just aint worth it. Mortgages are a lot longer than a year and will take forever to do.

Use an online calculator:
http://www.loansquick.com/ARMvsFixedRateCalc

EJ Lonergan
February 1, 2011 at 3:08 pm

You need to know your interest rate, your number of years/months, style of loan (fixed or variable) etc. etc.

Good Luck.

Jessie
February 1, 2011 at 3:17 pm

Okay, you’re looking at a bottom line of \$ 750.00 a month at a 6.5% interest rate.

You also need to consider other things to add in, though. Property taxes, homeowner’s insurance and the nasty one – PMI – primary mortgage insurance. Because your loan is 100% financed there is a good chance that you will have to pay PMI, it’s basically paying an insurance to the mortgage company so they can get their money back in the case that you default. (Yep, you’re betting against yourself! How messed up is that?!?)

On the bright side, the PMI goes away after you have 20% of what the house is worth in Escrow! (Please don’t ask me to explain that. I understand it but it’s hard to explain! LOL)

Overall you’re looking at about \$ 950.00 a month. Pay into that Escrow every chance you get!

(We bought a home 2 years ago at \$ 135,000 with a 4.9% fixed interest. The monthly payment is \$ 1100.00 a month. Ouch!)

Congrats and good luck.

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