User Manual

38 Mortgages and Amortization
BEAR-CH1.DOC BA Real Estate Guidebook Jackie Quiram Revised: 09/28/99 1:16 PM Printed: 09/28/99 1:16 PM
Page 38 of 36
Adjustable Rate Mortgage vs. Fixed-Rate Mortgage
1. Use the Adjustable Rate Mortgage worksheet to calculate
the payments for each adjustment period of the ARM and
record those values in steps 4, 9, 15, and 21 respectively.
2. Use the Mortgage Payment—Principal and Interest
worksheet to calculate the payment for the fixed-rate
mortgage and record that value in steps 3, 8, 14, and 20.
3. Enter amount of fixed-rate payment.
$
.
1,013.86
t
4. Subtract amount of initial ARM payment.
X
$778.39
5. View monthly savings with ARM payment.
j
$235.47
6. Multiply monthly savings/costs by
the number of months in the initial
ARM period.
O
12
j
$2825.65
T g
7. Record total savings/costs during this
period.
$2,825.65
8. Enter amount of fixed-rate payment.
]
3
$
.
1,013.86
t
9. Subtract amount of ARM payment for
second period.
X
$960.21
10. View monthly savings/costs during
second period.
j
$53.65
11. Multiply monthly savings/costs by
number of months in this adjustment
period.
O
12
j
$643.81
12. Add to recorded savings/costs from
step 7.
a ] g
$2,825.65
13. Record accumulated savings/costs.
j T g
$3,469.46
Comparing an ARM to a Fixed-Rate Mortgage
(Cont.)