Mortgages and Amortization 39
BEAR-CH1.DOC BA Real Estate Guidebook Jackie Quiram Revised: 09/28/99 1:16 PM Printed: 09/28/99 1:16 PM
Page 39 of 36
14. Enter amount of fixed-rate payment.
]
3
$
.
1,013.86
t
15. Subtract amount of ARM payment for
third period.
X
$1,153.34
16. View monthly savings/costs during
third period.
j
$
.
139.48
17. Multiply monthly savings/costs by
number of months in this adjustment
period.
O
12
j
$
.
1,673.75
18. Add to recorded savings/costs from
step 13.
a
]
g
$3,469.46
19. Record accumulated savings/costs.
j
T
g
$1,795.72
20. Enter amount of fixed-rate payment.
]
3
$
.
1,013.86
t
21. Subtract amount of ARM payment for
fourth period.
X
$1,354.86
22. View monthly savings/costs during
fourth period.
j
$
.
341.00
23. Multiply monthly savings/costs by
number of months in this adjustment
period.
O
12
j
$
.
4,091.99
24. Add to recorded savings/costs from
step 19.
a
]
g
$1,795.72
25. Record total savings/costs.
j
$
.
2,296.27
Continue the comparison until the accumulated savings in the last column are
reduced to or below zero. That is the breakeven point in the comparison.
Once it is apparent that the savings will be exhausted in a given year, divide
the monthly costs into the previous year’s total savings. This will tell you how
many months will occur during that period before the savings are exhausted.
For example, line 19 divided by line 22 equals 5.27 months.
