Why is the mortgage 603$? What's the formula

>>2606724
Dear God, don't buy a house OP. You can't handle it.

>>2606724
>i can buy this car now for 1000 USD or i can pay 100USD per month for ten months
>why is the monthly payment 100USD? what's the formula?

>>2606737
Please help me. I just graduated hs I don't understand this shit

Roughly this:

126,400 x .04 = $5,056 in annual interest

$5056 x 30 years = $151,680 in interest

EXCEPT - you pay off some of the prinicpal each month, so you only pay interest on what is left.

So, if your monthly payment is $603, the first month, you are paying $421.33 in interest and only $181.67 in principal, so the lnext month you only pay $420.73 in interest, so you are paying $182.27 in principal.

It goes on like this, with you paying a tiny bit more toward your principal every month until about the 13th year, you start paying more principal than interest.

Get it?

>>2606769
wrong

your example does not include interest.

>>2606852
why am I paying 181$ in principal

>>2606769
more like:
>i can buy this car now for 1000 USD or i can pay 10 USD per month for twenty years
>why is the monthly payment 10 USD? what's the formula?

>>2606724
Loan officer here
>not including taxes ad insurance

Where do you live? you may have to tack on $300 more bucks for those

>>2606894
because the Jews want you to pay them before you pay for the house

>>2606894
8/10

What flyover state do you live in that a house is only 126k? I live in Florida and I'd be lucky to find a house for $200k

>>2606941
no why is it 181$ per month

>>2606724
Look for a loan calculator that includes an amortization table. You'll totally understand after seeing it.

>>2606959
I dont know the actual equations that get you to this, but it is the amount you are actually paying toward the loan. the rest is the interest.

every month you pay like 50 cents more in principal and after 30 years, you pay off the loan.

File: 1473459710295.jpg (68KB, 633x758px) Image search: [Google]

68KB, 633x758px

>tfw pay £650 mortgage a month and only £300 of that goes towards paying down the loan

>>2606724

First take 4%. 1.04. You need to find this as a monthly rate, so 1.04^(1/12) = 1.00327% (0.327% interest monthly).

The formula is Total Cost of House = Monthly Payment * (1 + v + v^2 + ... + v^360) where v = 1 / (1+i)

>>2607418

The shorthand formula (sum of a geometric series) in this case is (1 - v^n) / i where n = 360 and i = 0.327