5/1 Arm Mortgage Payment

Before trying to locate an answer for you let me tell you my experiences with 5-1 arm.
I was wanting a mortgage on a home under $50,000.
All the 5-1 arm did, was to give me a specific low interest rate IF I paid the mortgage off in the first 5 years. After that, the interest rate went up for the rest of the 30 year mortgage.
The 5-1 arm did not affect my mortgage payment, except the interest rate was lower those first 5 years.

What priced house can I use, for your scenario?

$150,000?

And are you wanting a 30 year mortgage or 15 year?

Is this a conventional loan, or FHA, or HUD?

Conventional, 30 Years

Here is an example from a site offering:
2.625% (3.054% APR) with an adjustable rate mortgage.

$200,000 loan amount, paying 1.75 points, with 30% equity on today’s rate
Over 5 years, a 5-year ARM at 2.625% could save you:

30-year fixed
3.99% (4.208% APR)
= $953 per month

5-year ARM
2.625% (3.054% APR)
= $803 per month

OK so where is the formula.. I need a formula for getting these calculations not the calculations ai can get that from the site

5/1 ARM Fixed for 60 months, adjusts annually for the remaining term of the loan.

http://www.bankrate.com/calculators/mortgages/adjustable-rate-mortgage-arm-calculator.aspx?ec_id=m1024691

Here's another one:
http://www.dinkytown.net/java/MortgageAdjustable.html


You know the loan amount, and you know the interest rate your bank is quoting you.

Are you reading my question.. I have the site I dont need site to calculate I Need the formula for the calculation

I am asking on a real estate-mortgage forum.
I'll post the replies when I get one.

With the complicated nature of these formulas, I am not sure if and when I'll get an answer from the mortgage forum.

http://www.mtgprofessor.com/formulas.htm

The above is not for 5-1 arms, but you can see the complexity of the formulas.

If I get a reply from a mortgage specialist, I'll post it here for you.

Ok these are better.. I had something similar to this and my client is getting something a bit different and the formula client gave is nothing like this one.. Guess I will see if your get something from your posting thank you

Mortgage lenders, and borrowers, frequent this real estate forum, so there are people there who know. It is just a matter of waiting on a reply.
Things on there may be slow until after the Monday holiday.

I got a couple replies and they are not encouraging:

1. (from a loan officer): Initial payment is determined by initial interest rate which is stated in your Note, it is not something that you calculate.

2. Do you use Excel?
Then use this function =pmt( ).
Instead, if you want an analytical function, I can provide you with one.

I've asked for the analytical function.......

so 2 replies after 18 lookers.

I got you another reply.


"No, you need a calculator.
You assume that the mortgage is fixed for 30 years, at the initial level of the ARM.
 If you really want a formula:
 Mortgage = sum of the (product of the per period payment x discount factor) for payments 1 to 360 (12 per year for 30 years) where the discount factor is calculated from the ARM interest rate.
Therefore the per period payment is backed out of this."

I can only go by what they tell me.

The guy says:

"The formula in the link is correct, and also applies to 5/1 ARMs for the first 5 years" (the formula from the link above)

That is about as much as I can find, at the moment.
Hopefully others can help you more.

Guys I am trying to program thisn in SQL

SET @I = (@IntinalRate/ 1200)
SET @N = @Term*12

SET @APR_CALC_AMT = @Principle 
SET @APR_CALC_FEES = @Principle*(@Points/100)
SET @one_mo_int = @APR_CALC_AMT*@I
SET @totprin = 0

--Points are fees on a loan ie.. 1 point --> .01 x 100,000 = 1,000
SET @new_loan_amt = (@APR_CALC_AMT + @APR_CALC_FEES+@one_mo_int)+((@Points/100)*@APR_CALC_AMT)


SET @PnI_pmt2      = (@Principle*@I*POWER((@I+1),@N))/((POWER((@I+1),@N)-1))

Select allOpen in new window

No Weird this is what They client is using in there own program that I have to move to SQL

arm_bal = new_loan_amt_orig - totprin
new_loan_amt_orig = new_loan_amt
new_loan_amt=( APR_CALC_AMT + APR_CALC_FEES + one_mo_int) + ((POINTS / 100)*APR_CALC_AMT)
one_mo_int=(APR_CALC_AMT * rate) / 1200
totprin = totprin + currentprin
currentprin = arm_pandi – currentint
arm_pandi = PnI_pmt
PnI_pmt =(new_loan_amt * (rate/1200))/(1-(1+(rate/1200))**(-Apr_term))
currentint = new_loan_amt*calcint
calcint = (rate / 1200)
fully_ndx_rate = Apr_margin + APR_index (both fields in the file)
adj_period = APR_TERM - new_arm_period

Not the same as I am seeing online

I'll post the above and see what the loan officer says.