Question: Where can I find mortgage calculation programs on the web? : : Also, how do banks calculate a borrower’s net worth and his/her ability : : to pay mortgage, credit card and car loans per month? i.e. is there a : : formula/algorithm that is used by them? Does this differ between banks? : : The answer depends on which type of computer and operating system you use. : I suggest you simply try on your own to locate a mortgage calculator on : the Web if you haven’t yet done so. To do this, visit one of the many Web : search sites such as http://www.altavista.digital.com or go directly to the : popular shareware/public domain software sites for the particular type of : computer you use. :
Answer: The spreadsheet programs will do mortgage amortizations You need to set up some columns for the principle amount and the amount toward interest and the amount towards principle.
You create a formula that multiplies the principle times the interest rate divided by the number of months in a year. This will calculate the amount of interest due on the amount owed. Subtract this amount from the monthly payment and the rest is subtracted from the principle.
apply this formula each month and reduce the principle by the remainder of the payment.
The interest amount grows smaller each month and the principle payment amount grows larger each month.
This can be done in Excel. Lotus 123. or Quatro Pro. Even Microsoft Works.
You will be able to do what if scenarios by reducing the principle amounts by extra payments in another column if you want.
This works for home loans as well as car loans and other loans.
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