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Hey everyone, in this lesson, we will discuss the key calculations that are commonly used in mortgage loan transaction.
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When obtaining a mortgage, lenders and borrowers rely on specific formulas to determine affordability, interest payments, and loan terms.
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So let's get, so let's begin.
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Our first one, monthly mortgage payment calculations.
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The most essential calculation in a mortgage transaction is, determining the monthly payment principle plus interest.
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The formula that is used is m equals p times r times 1 plus r to the n divided by 1 plus r to the n to the n minus 1.
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So m is the monthly payment.
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P is the low minimum.
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Principal, ours monthly interest rate, and is the total number of payments.
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This calculation house borrows understand how much they need to pay each month based on their loan amount, interest rate, and loan terms.
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B, second one, loan to value ltv ratio.
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The ltv ratio determines the percentage of the home's value that is being financed through the loan.
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So the formula that's going to be in play as ltv equals loan amount divided by appraised property value, all multiplied by 100...