MORTGAGE CALCULATORS(More Info) |
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Step 6: Considering Present Value
Compare Two Mortgages Using PV (Type 2) Let us now consider an early termination to the loan from the previous step (Step 5) from the previous page. So click here for Generating the results will show 1) a difference in the rates of 1.00%, 2) a difference in the monthly payment of $59.84, 3) a difference in Please note the following important assumptions: 1) Closing costs of the loan, which would include lawyer's fees, title insurance, loan application fees, appraisal fees and any other fees associated with closing and processing the loan. 2) In determining a discount rate we assume a flat yield curve. It would be much too complex to construct a yield curve using current treasury prices by applying a process referred to as cubic splining and then subsequently discounting the difference in the cash flows between the two mortgages using the various rates along the curve that coincide with the various cash flows. It is deemed sufficient for consumer purposes to assume a flat yield curve. If you are the This is a great little analysis. It is However there are some limitations to this type of mortgage calculator; i.e. The difference between the results in Click here to continue reading on the next page. |

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