U.S. CitiesCity-Data Forum Index
Covid-19 Information Page
Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
Old 05-15-2011, 07:07 PM
 
10 posts, read 19,056 times
Reputation: 12

Advertisements

Interest Jan1, 2010=2.15%
Interest Dec31 ,2010=2.90%
Opening Principal Balance Jan 1, 2010: 247,220.02
Closing Principal Balance Dec31, 2010: 243,237.30
Total Interest Paid in 2010 : 5909.67
Total Principal Paid in 2010: 3982.72
Payment Frequency : Monthly, P+I Payment= 893

I need to know how are they calculating these figures, I even don't know what was total mortgage amount at start? Can we work out other figures by formulas. Please post detail calculations with formulas.
Rate this post positively Reply With Quote Quick reply to this message

 
Old 05-16-2011, 01:55 PM
 
Location: Laguna Niguel, CA
768 posts, read 4,141,306 times
Reputation: 456
The below is a pre-written article from me, most of it will apply to your situation.

On an ARM, when the rate is going to adjust, there are a few things that it is based on. First thing you want to do before reading this is go into the loan docs you signed/received a copy of at closing, in those docs are some papers called the "Note" or "Adjustable Rate Note" or "Adjustable Rate Rider", sometimes you'll get just an Adjustable Rate Note, or sometimes it'll be a Note with the two addendums, it varies slightly with each lender and each state.

Once you have that info you'll want to look for some items. The first is the "Index" that your rate is based on when it starts to adjust. Common indexes are the the LIBOR and treasury/CMT. There are 1 month, 3 month, 6 month, and 1-year averages of these indexes that are released each month (1 month LIBOR is the average LIBOR rate for the past 30 days, the 6 month LIBOR is a 6 month average of the LIBOR index, etc.). Odds are your index will either be a 6-month or 1-year average of an index, if it's a sub-prime program then it's likely tied to the 6-month LIBOR. OK, now that you've found your index in your docs, you'll now want to look for the "Margin". The margin is what is added to the index to determine your "Fully Indexed" interest rate when your rate adjusts. The margin is a fixed number, whereas the index number changes constantly. So as an example, let's say your rate is about to adjust, based on the 6 month LIBOR, and let's say the 6 month LIBOR is at 2.17% (because it is right now), and let's say your margin is 5%... when your rate adjusts, your fully indexed rate will be the fully indexed rate (2.17%) + the margin (5%) = 7.17%. Lenders usually round up to the nearest 1/8th of a percent, so figure it'd be rounded up to 7.25%.

The next thing to look for are the "Rate Caps", which can also be found in the documents you have. The rate cap is the maximum amount your interest rate can change on any given rate adjustment. There are three different caps - the initial cap, the subsequent cap, and the lifetime cap. The initial cap is the maximum amount the interest rate can increase over the rate you had for the fixed period. So while you are at 6.975%, and if your initial cap is 5%, the maximum it can increase to would be 11.975%... even if the index + margin equals over 11.975%. The next cap is the subsequent cap, meaning you also have a cap on any other time the rate will adjust either. That cap is usually lower, such as 2%. So let's say you went from 6.975% to 7.25% on your 1st adjustment, and then on the 2nd adjustment, the index + margin would equal 10%, but since your subsequent cap is 2%, the most your interest rate can adjust to would be 9.25% (7.25% + 2%). The final cap is the lifetime cap, and this is the maximum your interest rate can increase over the rate you had for the fixed period, and is often the same as the initial cap. So if the lifetime cap is 5%, and your initial fixed rate was 6.975%, then your interest rate may never exceed 11.975% for the entire term of the loan.

When you go to apply for a new ARM you can get all of this information upfront - index, margin + caps. The caps are usually in a X/X/X format, where the first X is the initial cap, 2nd X is the subsequent cap, and the 3rd X is the lifetime cap - such as 5/2/5, 2/1/5, etc.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 05-16-2011, 02:55 PM
 
10 posts, read 19,056 times
Reputation: 12
Open ARM Mortgage
The broker docs shows variable interest rate of CIBC Prime-0.100%compounded semi-annually, 25 years amortization, 5 years term, the original amount of loan at start was $253,158.71, there is nothing like in x/x/x format.

Last edited by RightAtHome; 05-16-2011 at 03:13 PM.. Reason: ARM
Rate this post positively Reply With Quote Quick reply to this message
 
Old 05-16-2011, 04:33 PM
 
10 posts, read 19,056 times
Reputation: 12
Some of Mortgage Docs are available on its website.
FirstLine Mortgages Solicitor Documents - Ontario
Rate this post positively Reply With Quote Quick reply to this message
 
Old 05-16-2011, 06:35 PM
 
Location: Laguna Niguel, CA
768 posts, read 4,141,306 times
Reputation: 456
So your interest rate is the CIBC Prime rate minus .1%.

Here is the historical index of the CIBC Prime rate.

http://www.fin.gov.bc.ca/PT/bcm/ref/...ricalPrime.pdf
Rate this post positively Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate > Mortgages

All times are GMT -6.

© 2005-2021, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top