Chapter 18 Real Estate Finance Tools: Present Value and Mortgage Mathematics
Major Topics
Introduction to the Time Value of Money
Present & Future Value of a Single Sum
PV & FV over Multiple Periods of Time (Contd.)
PV of an Annuity
PV of Annuity (Contd.)
Calculating a Loan Balance
Calculating the Principal and Interest Separation of a Mortgage (Contd.)
Future Value of an Annuity
Calculating Yields or Borrowing Costs
More Mortgage Calcs on a Financial Calculator
The payment is based on the annuity that equates to a present value of the mortgage loan when discounted at the contract rate of interest
Effective Yield Calculation
Effective Yield Calculation
Annual Percentage Rate (APR)
Points -A tool to increase Yield
Mortgage Pricing (Contd.)
ARM and FRM
ARM and FRM
Choosing b/w FRMs and ARMs
Refinancing
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