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Reverse Mortgage Calculations

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  • Reverse Mortgage Calculations



    Hi All:

    I'm aware of the PMT Excel function, but how would I set up a formula knowing only two variables?

    1. Assuming I know how much per month one can pay in total, and
    2. The percent interest rate

    ... I need the total amount that can be financed.

    Example:

    A. $3,900 maximum per month
    B. 5.00% interest rate
    C. = x (the amount to be financed)

    Thank you!

    EDR
    "Too often we enjoy the comfort of opinion without the discomfort of thought." - JFK

  • #2
    Re: Reverse Mortgage Calculations

    Hi EDR

    I think you want Goal Seek

    Comment


    • #3
      Re: Reverse Mortgage Calculations

      Thanks Dave!

      I just played with Goal Seek and read the help file. The middle "value" cell says it needs a "formula" which is exactly what I don't know, hence the posting of this thread. Please forgive my ignorance. Based on the two variables known, how would I use Goal Seek, without knowing the formula?

      Thank you sir!
      "Too often we enjoy the comfort of opinion without the discomfort of thought." - JFK

      Comment


      • #4
        Re: Reverse Mortgage Calculations

        Did you download the example on the page?

        Comment


        • #5
          Re: Reverse Mortgage Calculations

          Hi Dave!

          Yes, I did. Sorry, for my delay. I went out for some dinner and cocktails I just for back and I did review the example again in substantial detail and I was still confused by entering -5000, and "collapse through" and "collapse back through." Either way my situation didn't work and I may need more or less than 5,000 depending on the two known variables.

          Please forgive my ignorance, but I'm confused

          Thanks! EDR
          "Too often we enjoy the comfort of opinion without the discomfort of thought." - JFK

          Comment


          • #6
            Re: Reverse Mortgage Calculations

            if you are just paying interest not paying off credit then your formula would be 3900/5%*12. For other results more key figures are need, such as lenght of time to pay off etc.
            In formulae, depending on your locale, you might have to replace ; with , or vice versa.

            Comment


            • #7
              Re: Reverse Mortgage Calculations

              Thanks h1h!

              Yes, that is it. You are right, however, having an input (or formula) for time period (i.e. 30 years or 360 months) would be preferred. How would I work a pay off period into your current formula and still have it calcuate the proper interest calculations down throughout time? Remember, with each payment the amount due over time changes due to interest on the curent remainder. Thank you!

              I suppose my initial post was flawed. My bad. Sorry.

              So, there are THREE KNOWN variables:

              1. Max monthly payment one can make
              2. Percent Interest Rate
              3. Months to pay off

              4. = x (amount to finance)

              It's the x that I'm looking for based on the three known variables. Still, using Goal Seek, I'm not getting it. I tried it, but it requires a "formula", and if I knew the formula, I'm not sure if I would be posting this thread.

              Thanks to everyone!

              EDR
              Last edited by EDR; June 2nd, 2006, 17:58.
              "Too often we enjoy the comfort of opinion without the discomfort of thought." - JFK

              Comment


              • #8
                Re: Reverse Mortgage Calculations

                use the PV function
                =PV(5%/12;12*15;3900)
                where 5% is the interest rate
                12 is the number of payments per year
                15 is the number of years
                3900 is what you want to pay per month
                the result will be a negative amount which represents your starting asset
                In formulae, depending on your locale, you might have to replace ; with , or vice versa.

                Comment


                • #9


                  Re: Reverse Mortgage Calculations

                  Perfect!

                  Problem solved - thank you so much! : D

                  Works great now! Have a good one!

                  EDR
                  "Too often we enjoy the comfort of opinion without the discomfort of thought." - JFK

                  Comment

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