Excel Equation?

Question

Okay, I need an equation for a mortgage calculator. I already figured out the mortgage calculator but what I need is an equation which will tell me what my down payment should be. So that I can afford that rate at 30 years and at say 6.5%. So for example. My job might allow me to pay $2000 a month for a mortgage, and my mortgage is 400,000 with monthly payments for 30 years at 2528.27 a month. What should I pay in a down payment to make it $2000 a month. I want to be able to change my downpayment options because I have some money saved up, and the mortgages may change depending on the house. Does this make sense. It is confusing I know but I also know it can be done.

Answer 1

Your thinking is a little bit off.

If you have a 400, 000 mortgage for 30 years and you are paying 2528.27 per month..THAT means that you are BORROWING at 6.5%

Now, with the same borrowed amount, you want your payments to be $2000 per month..THAT means you have to find someone who is willing to lend you the $400,000 at 4.5%!!!..so in your mortgage calculator, just play with the interest rates...

OK..so you find you cant get 400,000 at 4.5%, but you still want to pay 2000 per month...lets say your best rate you can get is 6.5%


OK so now you know you will have to start playing with the MAXIMUM amount you can borrow....


in my mortgage calculator I found that if you borrow 318,000 at 6.5% for 30 years, your monthly payments will be 2009.98
.
So what does that tell you..YOU need to start looking looking at cheaper houses. You can only afford to borrow 318,000
with your criteria, not 400,000

Answer 2

The value of a mortgage can be calculated using the following equation:

V = A/r - A/[r*(1+r)^N)

where:

A = monthly payment
r = Monthly rrate = R/12 (R is yearly rate)
N = # payments.

If you let A be the amount you want to pay per month, you can figure out how much of a down payment you need.

A little algebra gives:

V = A* (1/r - 1/[r*(1+r)^N))
A = V/(1/r - 1/[r*(1+r)^N))

So -- you can use this formula to solve for the monthly payment if you know the value of the mortgage.

Answer 3

Just an Idea. Unless it's a school project, I would advize you to consult with someone who does mortgages. The variables are much greater than you're presenting. You have to consider principal, interest, Taxes and insurance, not counting if the property is in a home owners association.
Not an excell program, but you'll find plenty of calculators, follow the link.
Good luck.

Answer 4

well first of all youre talking abour future value of money now you need the interest rate plus comissions the bank is consdering now there are several formulas however they depend on wheter you pay at the beginning or end of the month.. plus there is a function called goal seek in excel, one you put the correct formula you can search and modify any value you want to now and get the value you want, in this case how much you need to pay to get 2000 a month... so sorry i couldnt be more specific, but it depends on variables i dont know and you dont mention.