One of the really cool parts aspects of Microsoft Excel is the functions Microsoft has created for you to use. This means that rather than have to develop a function from scratch you can use pre-built ones to do a plethora of tasks like Building your own Mortgage Calculator. The Mortgage Calculator or PMT function is just one of many Financial Functions available.
Okay, so how to build a mortgage calculator…
The first thing we have to do is to start by setting up a few basic headings. So lets begin by starting a new workbook and clicking in the first cell A1. Enter into cell address A1 the heading – Monthly Loan Repayments. Next off, enter into cell address A2 – Amount of Loan, cell address A3 – Interest Rate, cell address A4 – Length of Loan and then in A6 – Monthly Repayment.
In example mortgage calculator, we will take the Loan Amount, Interest Rate and Length of Loan and calculate your Monthly Repayment. Okay so in the corresponding field B1 enter the value of $200,000 and make sure you format the field as a currency. In cell B2 enter a value of 9.25% and format the field as a percentage and then finally enter in a value for the Length of the Loan as 25. The value you enter into the Length of the Loan field is in years.
Now its time to create the formula that will do your calculation for the Monthly Repayment. The function we will use for this calculation is called the PMT function. The PMT function always returns a negative number so one of the things we will need to do is to convert it into a positive number, but a little on that later.
There are three arguments we will use for this formula and they are -
= PMT(Monthly Interest Rate, Number of Payments, Amount Borrowed)
So to work out the Monthly Interest Rate we simply take the value in B3 and divide it by 12 – B3/12. The PMT function works on the basic of the number of payments you are going to make, so if we are going to make monthly payments on our mortgage we simply take the number of years in cell B4 and multiply it by 12 – B4 *12.
This means that to calculate the Monthly Repayment for our mortgage we need to enter the following formula -
= PMT(B3/12, B4*12, B2)
Now as I said before, the PMT function always returns a negative value, so to turn this into a positive value we simply type the PMT function with the Absolute Function encapsulating it as shown below -
= ABS(PMT(B3/12,B4*12,B2))
Simply type the formula above into the cell B6 and press the enter key. You must now format the cell address B6 as a currency and you can do that by simply pressing the Dollar Symbol on the Formatting Toolbar. As soon as you enter the formula and press enter you should get a result of $1712.76. If you do not get this answer, simply go back and make sure that you have entered the formula correctly.
The cool part about this Mortgage Calculator is that you can go back and change any one of the values in B2, B3 and B4 which are the Loan Amount, Interest Rate and Length of Loan to work out what your monthly mortgage repayments will be.
The cool part about this simple tool is that it tells you really quickly whether borrowing massive amounts from the bank is worth it and whether you can really afford that mortgage. Why not check out what your repayments will be if your interest rate went up by 2 or 3%, it can be really interesting to see the impact on your budget.
Simple tools like this can save you thousands of dollars and can also help you see what changes interest rates will have on your own budget. It is certainly worthwhile building yourself a Budgeting Spreadsheet and the mortgage calculator to work out just what you really can afford especially in these uncertain times.
For most people, one of their biggest dreams in life is to own a home. With so many mortgage options available, it can often be confusing figuring out what it means to acquire an affordable mortgage. There are a number of indicators that will tell you if a mortgage is affordable. Below is a list of indicators to help you determine if a mortgage is affordable.
1. Because of the current state of the housing market, lenders are now offering great deals on interest rates. Currently there are deals available where you can get a mortgage with an interest rate of around 5%. Many financial experts recommend acquiring a 15 to 30 year mortgage locked in at a low interest rate. The complete mortgage term could save a homeowner thousands of dollars. Locking the interest rate as a fixed-rate will normally have a term of 15 or 30 years. This will ensure your interest rates will not increase over the life of the mortgage. It is important to remember that the longer the mortgage term, the lower your interest rates. As well, the higher the mortgage that you obtain, the higher your monthly mortgage repayments will be. There are variable rates one can secure with their mortgage, but they fluctuate with the market. If the market is doing well, your interest rates will decrease, but if the economy starts to deteriorate your interest rates will increase.
2. Before applying for a mortgage, you first have to assess how much you can afford. You can determine how affordable your mortgage will be by using an online mortgage calculator. You will enter such information your income which will help determine how much you can actually afford to pay each month. Remember this is a base amount that does not include the cost associated with the purchase of the home. You will also have to put down a deposit. The higher the deposit, the lower your monthly payments will be.
3. Paying a monthly mortgage is not the only expense you have to consider. There will be other expenses such as utilities and home maintenance. It is also important to remember that you will have to consider additional expenses such as closing fees, title fees, attorney fees, taxes, registration fees, monthly homeowner insurance payments, etc.
A mortgage is probably the biggest financial commitment you will make in life. It is important to acquire an affordable mortgage to ensure that payments can be met even if your financial situation changes. Financing your mortgage is a serious life investment. The key to getting an affordable mortgage is to compare quotes from several different lenders to get a rate that is low and will not drastically increase if the market takes a down turn. As well, you should always read the fine print of the mortgage contract to avoid any future unexpected surprises that could affect your monthly payments. With the current incentives now being offered for mortgage seekers, this is a great time to find a great deal on a mortgage.
Using a mortgage calculator is the best way for you to figure out your monthly mortgage payments. Buying a house you want to always get the best deal that you can and negotiating a lower price is advisable. In the end the type of house you can afford is going to be determined by the monthly payment.
Mortgage calculators are easy to find and they can be a great tool when you are looking online at house prices. Try not to get hung up on the overall price of the house because the amount you pay each month is going to make the difference in whether or not you can afford it. Using a calculator is going to help you find out the monthly price of any home.
They are easy to use because you just need to enter simple information such as the price of the home, the amount of interest you will be paying on the new home loan and finally the length of the loan. The most common loan is a 30 year loan but in some cases people do 15 year and even the rare 40 year loans. You can use the mortgage tool to help you see what the payment will be for any length of time.
Remember that when you are looking to buy a home you need to know what it is going to cost you on a monthly basis. Everyone has a set amount they have to spend each month for living expense. You are going to fit your mortgage into that budget just like you did when you rented.
When it comes to buying holiday property, who doesn’t want a bargain? If you’ve always wanted to own a second home, buy to let or holiday property in Spain, now is the time to buy. Why? The housing market in Spain has been experiencing some decline. People just are not buying properties. This means that there are more properties on the market than there are buyers. When this happens, a buyer’s market is created. In a buyer’s market, you can buy virtually any house you want for a great price.
Currently, there are bargain properties to be found all over Spain. Whether you want to purchase an island property or an urban property with a quick train link to London, you can find it in Spain. Granted, one man’s bargain is another man’s “out of reach.” So, you will have to do some research to find the best area, the best bargain and the best deal for your particular financial situation.
One of the cheapest places to buy property in Spain is Costa Blanca. Here flats start out at about 40,000 pounds and top out just a little over 150,000 pounds. Bargain prices on property can be found everywhere and a party atmosphere is a plus for some people. For others, the area is a little too thrown together and boisterous for their tastes. Properties here are not normally the highest of quality, but they can be purchased cheaply.
On the other end of the spectrum is Costa Brava. Property prices here start out at about 300,000 pounds for a standard apartment. Shops, transportation, culture and fine dining make this the hub of Spain for many people.
In addition to these two locations, there are properties all over Spain in virtually every price range. In order to find a bargain, you need to set a realistic budget. If you need help with this, you can talk to a financial expert or mortgage lender. You can even gain a lot of insight by using a mortgage calculator.
Once you have a clear budget in mind, start studying areas of Spain where you would like to live. Take everything into account including the cost of living, stability of housing market, location, amenities, lifestyle, etc. Think about everything that will affect your purchasing power.
When your budget and preferences agree on a particular area to settle, start looking for properties in Spain. The help of an agent located in Spain is invaluable. He or she can let you know about new properties being listed and give you an idea of what list prices are bargains and which ones are inflated.
Remember; the housing market in Spain is experiencing a slow period. If you do your homework and find a bargain in today’s market, the property will appreciate substantially when the market turns around. You stand to earn quite a bit on your investment if you are willing to put in the time to find the property and hold onto it for a while.