1 / 13

Mortgage Designs

Interest rates and more… Rebecca LeMaster. Mortgage Designs. Agenda. Fixed Mortgages Other Mortgage Options Adjustable Mortgages Balloon Mortgages. Fixed Mortgages. $100,000 6% 30 Year. Month Payment Principal Interest Balance 1 $599.55 99.55 500.00 $99,900.45

remedy
Télécharger la présentation

Mortgage Designs

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Interest rates and more… Rebecca LeMaster Mortgage Designs

  2. Agenda • Fixed Mortgages • Other Mortgage Options • Adjustable Mortgages • Balloon Mortgages

  3. Fixed Mortgages $100,000 6% 30 Year MonthPayment Principal Interest Balance 1 $599.55 99.55 500.00 $99,900.45 2 $599.55 100.05 499.50 $99,800.40 3 $599.55 100.55 499.00 $99,699.85 4 $599.55 101.05 498.50 $99,598.80 5 $599.55 101.56 497.99 $99,497.24 ……….. …….... ………. …………. 356 $599.55 584.78 14.77 $2,368.52 357 $599.55 587.71 11.84 $1,780.81 358 $599.55 590.65 8.90 $1,190.17 359 $599.55 593.60 $5.95 $596.57 360 $599.55 596.57 2.98 $0.00

  4. Types of Mortgages - Options • Fixed • Adjustable • Balloon • Bullet • VA • FHA • Interest Only • Reverse

  5. Adjustable Rate Mortgages (ARM) • Types: 1-year (1/1), 3/1, 5/1, 7/1, 10/1, 3/3, 5/5, 5/25… • Rate Adjustment Period • Initial Rate Period • Interest Rate Index (LIBOR, 1yr Treasury) • Margin Added to Index • Initial, Periodic and Lifetime Caps • Floor, Ceiling

  6. ARM (5/1) $100,000 3% initial 30 Year 2.5 % margin Index: 1 year LIBOR (5%) Caps: 5% initial, 2% annual, 5% lifetime, 3% Floor, 8% Ceiling Month Rate Index Payment Interest Principal Balance 1 3.0% 4.917% 421.61 250.00 171.61 99,828.39 2 3.0% 4.833% 421.61 249.57 172.04 99,656.35 3 3.0% 4.750% 421.61 249.14 172.47 99,483.88 4 3.0% 4.667% 421.61 248.71 172.90 99,310.98 5 3.0% 4.583% 421.61 248.28 173.33 99,137.65

  7. ARM (5/1) Month Rate Index Payment Interest Principal Balance 61 6.417% 3.917% 595.68 475.40 120.28 88,785.71 62 6.417% 3.833% 595.68 474.76 120.92 88,664.79 63 6.417% 3.750% 595.68 474.11 121.57 88,543.22 73 5.583% 3.083% 551.64 406.74 144.90 87,274.53 74 5.583% 3.167% 551.64 406.07 145.57 87,128.96 75 5.583% 3.250% 551.64 405.39 146.25 86,982.71 85 6.583% 4.083% 603.02 469.81 133.21 85,502.26 86 6.583% 4.167% 603.02 469.07 133.95 85,368.31 87 6.583% 4.250% 603.02 468.34 134.68 85,233.63 97 7.417% 4.917% 646.11 519.09 127.02 83,860.74 98 7.417% 4.833% 646.11 518.31 127.80 83,732.94 99 7.417% 4.750% 646.11 517.52 128.59 83,604.35

  8. Fixed or Adjustable?(Were you paying attention???) Which is a better deal? i.e. Which has a higher/lower cash outflow? Fixed: $193,255.20 Adjustable: $204,807.39 Difference: $11,552.19 Who would want a fixed rate? Who would want an adjustable rate? Fixed: Older adults, planning to stay long-term Adjustable: Younger adults, not planning to stay long-term

  9. Balloon Mortgages • Typically 5, 7 or 10 years • 15, 20 or 30 year amortization period • Must be paid off or refinanced at end • Not common anymore • Often convertible, terms/conditions vary

  10. Balloon Mortgage • Monthly payments, 30-year amortized, balance due at end of short time period • $100,000, 5%, 5 year (60 months) Month Payment Interest Principal Balance

  11. Summary • Fixed Mortgages • Many Types of Mortgages • Adjustable Rate Mortgages • Balloon Mortgages

  12. References • http://www.homeloanlearningcenter.com/mortgagebasics/mortgagetypes.htm • http://www.usa.gov/topics/family/homeowners/buyingselling/mortgages/types.shtml • http://www.mortgagecalculator.org/helpful-advice/types-of-mortgages.php • http://www.isoldmyhouse.com/fsbo/mortgage-types.cfm • http://www.investopedia.com/university/mortgage/mortgage4.asp • http://www.usa.gov/topics/family/homeowners/buyingselling/mortgages/types.shtml • https://www.lendingtree.com/mortgage/arm-interest-rate-caps-article • http://www.mtgprofessor.com/Calculators/Calculator7b.html • http://www.mortgagecalculator.org/helpful-advice/types-of-mortgages.php • http://en.wikipedia.org/wiki/Adjustable-rate_mortgage • http://www.bankrate.com/calculators/mortgages/mortgage-calculator.aspx?MSA=6442&MSA=6442&MSA=6442&MSA=6442 • http://tcalc.timevalue.com/all-financial-calculators/mortgage-calculators/balloon-mortgage-calculator.aspx?PRINCIPALAMOUNT=100000&DOWNPAYMENTAMOUNT=0&DOWNPAYMENTAMOUNT_TYPE=Percent&TERM=30&TERM_UNITS=Years&BALLOONPAYMENTAFTER=5&BALLOONPAYMENTAFTER_UNITS=Years&INTERESTRATE=5.0%25&COMPUTE=COMPUTE&SHOWAMORTIZATIONSCHEDULE=on&CALCULATORID=HF04&HIDEFORMTAG=TRUE&TEMPLATE_ID=www.timevaluecalculators.com_1&PostBack=true#results • http://ncacu.org/borrow/mortgages/#balloon • http://rws.rwstools.com/templateroot/Articles/LoanPrograms.asp?ArticleID=1026&pvlid=5062& • http://math.info/Misc/Amortization_Formulas/

  13. Questions???

More Related