Owner Finance Calculator

Using the Owner Finance Calculator

This guide will take you systematically through the process of using the Owner Finance Calculator. This tool will help you determine the financial aspects of owner-financed property purchases, providing you accurate insights into payments and financial obligations over time.

Step 1: Enter Basic Property Information

• Sale Price ($): Begin by entering the total sale price of the property in the designated field. This value must be at least $1,000.
• Down Payment ($): Input the down payment amount you plan to make. While the minimum is $0, a larger down payment can lower your monthly payments.

Step 2: Input Financial Details

• Annual Interest Rate (%): Enter the annual interest rate for the loan. This should be a decimal value between 0.01% and 100%.
• Loan Term (Years): Provide the loan term in years, with a range between 1 and 30 years to select from.
• Balloon Payment After (Years): Optionally, specify after how many years you plan to make a balloon payment. This is not mandatory and the range is between 1 and 30 years.

Step 3: Calculate Property-Related Expenses

• Annual Property Taxes ($): Enter the estimated annual property taxes. This amount will be divided into monthly payments.
• Annual Insurance ($): Input the annual insurance cost for the property to be accounted for in your monthly calculations.

Step 4: Review Calculated Results

After filling in all necessary fields, the calculator will compute several important financial figures:

• Loan Amount: The principal amount financed, calculated as the sale price minus the down payment.
• Monthly Principal & Interest: This is your monthly payment towards loan principal and interest.
• Monthly Property Taxes: Displays the monthly amount for property taxes.
• Monthly Insurance: Shows how much you’ll pay monthly for insurance.
• Total Monthly Payment: Summarizes your complete monthly obligation, including principal, interest, taxes, and insurance.
• Total of All Payments: Projects the total sum of payments over the life of the loan.
• Total Interest Paid: Indicates the total interest paid over the loan term.
• Balloon Payment (if applicable): If you have specified balloon years, this will show the expected balloon payment after the defined period.

With these steps, you can comprehensively analyze the financial implications of an owner-financed property purchase using the calculator. Be sure to review each entry carefully and understand the output values to make informed real estate decisions.