Washing Capital - Reverse Mortgages

Call 800 287-1077 - Conventional
Call 888 704-2634 - Reverse

Washing Capital - Reverse Mortgages

Call 800 287-1077 - Conventional
Call 888 704-2634 - Reverse

Reverse Mortgage For Seniors
 GENEVA FINANCIAL, LLC - NRMLA Member
 National Reverse Mortgage Lenders Association

REVERSE MORTGAGE PROCESS  
Step by Step including rate update

Reverse Mortgage For Seniors
 GENEVA FINANCIAL, LLC - NRMLA Member
 National Reverse Mortgage Lenders Association

REVERSE MORTGAGE PROCESS  
Step by Step including rate update

Mortgage Calculations by Hand

First you must define some variables to make it easier to set up: P = principal, the initial amount of the loan I = the annual interest rate (from 1 to 100%) L = length, the length (in years) of the loan, or at least the length over which the loan is amortized.

The following assumes a typical conventional loan where the interest is compounded monthly. First we'll define two more variables to make the calculations easier: J = monthly interest in decimal form = I / (12 x 100) N = number of months over which loan is amortized = L x 12

Now for the big monthly payment (M) formula ... it is:

J M = P x ------------------------ 1 - ( 1 + J ) ^ -N where 1 is the number one (it does not appear too clearly on some browsers)

So to calculate it, you would first calculate 1 + J then take that to the -N (minus N) power, subtract that from the number 1. Now take the inverse of that (if you have a 1/X button on your calculator push that). Then multiply the result times J and then times P.

The one-liner for a program would be (adjust for your favorite language):

M = P * ( J / (1 - (1 + J) ** -N))

So now you should be able to calculate the monthly payment, M. To calculate the amortization table you need to do some iterations (i.e. a simple loop). Here are the simple steps :

Step 1: Calculate H = P x J, this is your current monthly interest
Step 2: Calculate C = M - H, this is your monthly payment minus your monthly interest, so it is the amount of principal you pay for that month
Step 3: Calculate Q = P - C, this is the new balance of your principal of your loan.
Step 4: Set P equal to Q and go back to Step 1: You thusly loop around until the value Q (and hence P) goes to zero.

Many people have asked how to find N (number of payments) given the payment, interest and loan amount. The answer to the actual formula is in the book: The Vest Pocket Real Estate Advisor by Martin Miles (Prentice Hall). Here's the formula:

N = -1/Q * (LN(1-(B/M)*(R/Q)))/LN(1+(R/Q))

Where:

  • Q = amount of annual payment periods
  • R = interest rate
  • B = principle
  • M = payment amount
  • N = amount payment period
  • LN = natural logarithm
Branch of GENEVA FINANCIAL, LLC 
Offices:   1718 NW 56th St #204 Seattle WA 98107     1018 E Guadalupe Rd Tempe AZ  85283    888-704-2634  Fax 206 219-6696

License Number: #2834900002

 

Branch of GENEVA FINANCIAL, LLC 
Offices:   1718 NW 56th St #204 Seattle WA 98107     1018 E Guadalupe Rd Tempe AZ  85283    888-704-2634  Fax 206 219-6696

License Number: #2834900002