Tip:
Highlight text to annotate it
X
When buying a new home, one of your most important tools is a mortgage loan calculator. It lets
you quickly determine the size of your mortgage payment with varying loan amounts, interest
rates, and repayment terms. Because it is so important, you will want to use the absolute
best mortgage calculator you can get. There are numerous places on the Internet
that offer free mortgage calculators. However, most of these sites leave tracking cookies
on your computer and are likely to be littered with advertisements. Maybe this isn’t the
best place to be planning the most important financial decision of your life.
The best mortgage calculator is your own personal spreadsheet. It gives you the ability to make
a detailed analysis of different mortgage loan terms, without someone recording all
your actions. Not only will it calculate your monthly payment, but it can lay out your entire
payment schedule. In the next few minutes, we’ll show you
exactly how to get your own mortgage loan spreadsheet. You start by copying a pre-made
Google Drive spreadsheet. Once you copy the spreadsheet, it is your own private version.
You can modify it in any way to meet your needs. If you want to use it completely off-line,
you can export it to Microsoft Excel. After we show you how to copy the spreadsheet, we’ll
show you how to use it. There are no hidden cells or macros, so it can easily be customized.
Let’s get started. The first step is to create your own Google
account, if you don’t already have one. Your Google account gives you access to your
own Google Drive. Google Drive lets you create and maintain various online documents that
are similar to those available in Microsoft Office. For our mortgage calculator, we will
use a Google Drive spreadsheet. To access the Google Drive spreadsheet for
the mortgage calculator, select the link listed below in the description section of this video.
When the spreadsheet opens, you will not be able to edit it. You will need to make a copy
of it by selecting the “File” pull-down. You can then give your spreadsheet its own
name. The spreadsheet is now in your Google Drive
directory. We can go to your Google Drive by selecting the icon in the upper left-hand
corner and see it listed. Let’s open your private version of the spreadsheet
from your Google Drive. If you would rather use it off-line as a Microsoft Excel spreadsheet,
go to the “file” pull-down menu and select “download as Microsoft Excel.”
The cells that are shaded green are meant to be filled in by the user; the rest of the
cells are calculated based upon the values in the green cells.
There are three sections in the spreadsheet. The first section uses the basic terms of
the loan to calculate the monthly payment. Entering various loan terms makes it easy
to see how this will affect your monthly payment. The second section lets you add in additional
charges that are typically required on many loans. You can put in estimates for these
charges to get a better idea of your total monthly payment.
The last section is the payment schedule for the entire term of the loan. This makes the
spreadsheet a valuable tool that can be used throughout the life of the loan. It is automatically
updated whenever you change the loan terms. Once you have secured your mortgage loan,
the terms should not be changed so you can accurately track your progress with the repayment
of your loan. Each line of the schedule refers to a monthly payment, showing how much is
applied to interest and to loan principal. If you make extra principal payments, they
can be applied. Row one has the totals for each column. Column
J performs a slightly different calculation. The value in cell J1 shows the projected loan
payoff date. Extra principle “what-ifs” are easily
evaluated. As an example, suppose you decided to make an extra principle payment of $1000
each year after you receive your income tax returns. We enter the extra principle payments
and determine that the life of the loan is shortened more than 3 years, and we end up
saving over $25,000 in interest over the life of the loan.
In other videos we’ll illustrate various other ways to use this spreadsheet.
If you liked video and want to continue to learn more about various aspects of home buying,
please subscribe to the home buyer channel. If your business involves home buying or financing,
we encourage you to embed this video into your website.
Use the comment section to let us know what you think of this video and what other types
of home buying topics you would like to see in the future.