COMPUTATION OF INCREASED INTEREST PAYMENTS
PROJECT:
TRACT:
OWNER:
A. GENERAL
The payment for increased mortgage interest cost shall be the amount which will reduce the mortgage balance on the new mortgage to an amount which
could be amortized with the same monthly payment for principal and interest as that for the mortgage(s) on the displacement dwelling. This is referred
to as the “buy down amount.”
The payment is to be calculated using any financial calculator or software program that is designed to calculate the unknown amount when you know
three of the following four items: 1)present value of the mortgage 2) the interest rate 3) the number of periods of the mortgage or term and 4) the
principal and interest payment.
B. MORTGAGE PAYMENT
In order to recalculate the actual remaining term of the existing loan, in step E1, it is necessary to know the actual amortized principal and interest
payment required for the existing mortgage.
1 Existing mortgage payment $
C. INTEREST RATES
The difference between the interest rates of the existing and new loans is one of the basic factors in the calculation of the payment. The actual rate of
the existing loan is used. On the new loan, the rate used is the actual rate, not to exceed the rate currently charged by mortgage lending institutions in
the vicinity of the replacement property, referred to as the prevailing interest rate.
1 Existing interest rate %
2 New interest rate %
3 Prevailing interest rate %
D. MORTGAGE BALANCE
The payment shall be based on the unpaid mortgage balance(s) on the displacement dwelling; however in the event the person obtains a smaller
mortgage than the mortgage balance(s) computed in the buy down determination, step G2, the payment will be prorated and reduced accordingly, step H.
1 Existing mortgage balance $
2 New mortgage balance $
E. MORTGAGE TERM
The payment shall be based on the remaining term of the mortgage(s) on the displacement dwelling or the t