How Do You Calculate Monthly Payment?? I'm Lost.
Business By nglez09 Updated 12 May 2007 , 1:43pm by karensjustdessert
This is the information for a local:
Effective Cost to Own
Annual Debt Service Expense $71,818
Less: Annual Principal Paydown (14,362)
Less: Annual Interest Deduction (25,281)
Less: Annual Structural Deprecation (7,040)
Less: Annual T1 Depreciation -
Effective Annual Debt Expense $25,135
Monthly Effective Cost to Own $2,095
Monthly Effective Cost PSF $.45
Financing Assumptions
Square Feet 4,700
Price PSF $204.25
Purchase Price $960,000
Tenant Improvements (PSF) -
Total Cost $960,000
Down Payment 10% $96,000
Loan Amount 90% $864,000
Amortization (Years) 25
Interest Rate 6.65%
Cap Rate 7.00%
So I know that the total is $864,000. I checked with a mortgage calculator to get a rough estimate with the 7% interest and it said monthly payments were going to be in excess of $6,000???
I don't get how that would work; in 25 years, $1.5 million would have been payed at that rate. . .
And that interest is applied towards every payment?
$960,000 * .07%= $67,200
Are there other costs I'm overlooking?
Don't forget that the 7% is and ANNUAL percentage rate, so you're paying 7% PER YEAR on the balance. So, that $67,200 is only the interest for the first year of the loan, roughly.
Welcome to the wonderful world of credit.
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