How To Calculate Payments Owner-Carry

Comments(12)

• 
  NewKidinTown222nd July, 2005

  What are the terms of your agreement? Your terms dictate how to calculate your payments.

• 
  CarolG22nd July, 2005

  SmileyFace,
  
  I understand now how to calculate the monthly payments, but what if the property is free and clear and I purchased the property for $100,000 and I got a LTV at 65% and had the seller/owner carry back 35%.
  
  How would I calcuate the term in years in paying off the the note for 35%? Does that make sense?
  
  Thanks.
  Carol

• 
  edmeyer22nd July, 2005

  Carol,
  
  If you have Excel or something similar on your computer that has financial functions, you can do the calculations. There are several quantities that interact with each other. They are
  
  Principal Value PV
  Number of Periods nper
  Interest Rate rate
  Final Value FV (0 for a fully amortized loan)
  Payment PMT
  
  The PMT function will calculate the periodic payment amount given the values of the other quantities.
  
  A 10 year loan has 10 times 12 = 120 monthly payments so nper is 120. If the initial amount of the loan is $35,000 then PV is 35000. If the annual interest is to be 6% then rate should be .06 divided by 12 which is .005. If the final amount owed after 10 years is zero then FV = 0.
  
  For this example the monthly payment is $388.57.
  The PMT function in Excel has the format PMT(rate,nper,pv,[fv],[type]). The arguments having [ ] are optional and the final value is assumed to be zero.
  
  I hope this is what you are looking for. If not, I can probably be of further help.
  
  Regards,
  Ed
  
  
  
  [ Edited by edmeyer on Date 07/22/2005 ][ Edited by edmeyer on Date 07/22/2005 ]

• 
  edmeyer22nd July, 2005

  Thank you, NewKid2
  
  You are correct. I started with a 30 year example and missed some editing! I have made the correction.

• 
  CarolG9th August, 2005

  Everyone!
  Thank you for your help!
  Carol

• 
  IBuyHousesInc9th August, 2005

  http://www.calculatorweb.com/calculators/amortcalc.shtml i use this site then you can cut and past results to an excel spread sheet

• 
  CarolG9th August, 2005

  Thanks for the tip!
  
  Carol
  Ohio

• 
  JGK0316th August, 2005

  Carol
  One last suggestion.
  Buy a TI BAII PLUS financial calculator ....$20.
  It does all that in a few key strokes. I input three of the 4 variables---term, r/i, PV and payment and I can solve for any one unknown.
  eg If I knew the payment, term and interest I can calculate the PV...
  eg If I knew the payment, PV and interest I can calculate the term etc etc etc
  
  It is much easier and more portable than a spreadsheet...and after you have done it a few times it is really simple....
  JK

• 
  CarolG16th August, 2005

  JK,
  
  Thank you.
  Carol

• 
  CarolG18th August, 2005

  Thanks everyone!

• 
  mattfish1118th August, 2005

  Carol - send me an e mail and I will respond with the amortization Table...
  
  matthew
  dot
  kling
  AT
  everestre
  DOT
  com
  
  Good Luck!
  
  _________________
  Matty Kling[ Edited by mattfish11 on Date 08/18/2005 ]

• 
  CarolG18th August, 2005

  Mat,
  
  Just sent you an email.
  
  Thanks.
  Carol