With a number of banks offering very low home rates as low as 5.75%, it’s just logical that I also update our amortization factors table to include these annual interest rates, and I did just that!

How much is your monthly amortization payment?

Checkout the complete list of amortization factors for annual interest rates ranging from the current lowest home loan rate of 5.75% all the way up to 20%, in 0.25% increments, and payment terms ranging from 1 year to 30 years to pay. Just click on the link below:

>>>Updated Amortization Factors Tables

Checkout these related articles:

How to calculate for amortization payments – Don’t know how to compute for your monthly amortization payments? Checkout this article to learn how!

Low home loan rates – what you need to know before it’s too late – The low home rates being offered by some banks right now are tempting, not just for real estate investors, but also for home buyers. But before you apply for a home loan, there are things you really need to know…

Mortgage calculator – Don’t want to manually compute for monthly amortization payments? Checkout this online mortgage calculator which you can also use to check if your manual computations are correct.

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To our success and financial freedom!

Jay Castillo

Real Estate Investor

DTI Real Estate Broker License #: 20056 (PRC registration number to follow)
Blog: http://www.foreclosurephilippines.com
Follow me in Twitter: http://twitter.com/jay_castillo
Find us in Facebook: Foreclosure Investing Philippines facebook page

Text by Jay Castillo and Cherry Castillo. Copyright © 2011 All rights reserved.

PS. Don’t be the last to know, subscribe to e-mail alerts and get notified of new listings of bank foreclosed properties, public auction schedules, and real estate investing tips. Mailbox getting full? Subscribe through my RSS Feed instead!

Table of amortization factors updated with low home loan rates is a post from: Foreclosure Investing Philippines

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In my previous post: How to compute for the monthly amortization payment without a mortgage calculator,  I showed how I compute for the monthly amortization payment by hand. Tyrone of  Millionaire Acts through his comment asked: “How about if we don’t have access to the amortization factors table? Is there a way to compute it?”. I answered yes in my own comment and I would like to illustrate how it can be done through this post.

I got the following amortization factor formula when I reviewed for the November 2007 Real Estate Brokers Licensure Exam under Engineer Enrico Cruz:

I

Amortization Factor = ———————————–

-M

1 – ( 1 + I )

Where:

I = the monthly interest rate. You can easily get this by dividing the annual interest rate by 12

M = the loan payment term in months. Just multiply the loan term by 12.

Let us use the same example in my previous post.
A foreclosed property is being sold for Php 1 Million and you can purchase it with only 20% down payment, with a maximum payment term of 10 years, at an annual interest rate of 12%. What would be the amortization factor you will use to compute for the monthly amortization?

First, let us compute for the Monthly Interest Rate (I) and the Loan payment term in Months (M)

I = Annual Interest rate/12

= 12%/12
= 1%

M = 10 years x 12 months/year

= 120 months

1%

Amortization Factor = ———————————–

-120

1 – ( 1 + 1% )

0.01

= ———————————–

-120

1 – ( 1+0.01 )

= 0.01434709

As you can see, we arrive at the same value for the amortization factor we used in my previous example. Of course I would only use the formula in excel as I would not want to compute this by hand, it would be very difficult to calculate for a number with a negative exponent like that in the example  right?!

I would still prefer to keep a copy of the amortization factor table in my wallet so I don’t need to bring my laptop with me everywhere. I can then compute by hand or use the calculator on my cellphone. By the way, I believe there is also a built-in function in excel that can do this calculation but I haven’t tried it yet.

Easy right?!

—

To our financial freedom!

Jay Castillo
Real Estate Investor
Real Estate Broker License #: 20056
Blog: http://www.foreclosurephilippines.com
Click here to contact me via E-mail
Mobile phone (Call/SMS): +639178843882
Twitter: http://twitter.com/jay_castillo
Facebook: Foreclosure Philippines fan page

Text by Jay Castillo. Copyright © 2009 All rights reserved.

P.S. – If you are a new visitor, please start here to learn more about foreclosure investing in the Philippines.

P.P.S – If you feel that anyone else you know might benefit from this post, please do share this to them and don’t forget to subscribe to e-mail alerts and get notified of new listings of bank foreclosed properties, public auction schedules, and real estate investing tips. If your inbox is getting full, you may subscribe through my RSS Feed instead.

How to calculate for the amortization factor is a post from: Foreclosure Investing Philippines

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In this post I will share how to compute for monthly amortization payments for foreclosed properties without the need to use any special mortgage calculator. By the way, this would also work for installment loans for assets other than real estate where the monthly amortization payments also contain both principal and interest.

If you’re a real estate investor or if you want to become one, I’m pretty sure you’re interested to learn how a loan calculator or mortgage calculater works or at the very least, you want to learn how to calculate for monthly amortization payments.

If you lack any interest on mortgage calculators or if you are simply afraid of numbers, I’m really sorry but you have no choice but to learn this because real estate investing is a numbers game.

Real estate investing is a numbers game

Real estate investing is a numbers game and one number that you need to know is the monthly amortization you will have to pay for a foreclosed property that you are looking at. It will help determine if an investment property will produce a positive cashflow. Without positive cashflow, you will have no passive income, and you can kiss your dreams of becoming financially-free goodbye…

I’ll keep it short and simple

You will need the following information:

• The loan balance or Principal amount. This is selling price less down payment, if any.
• The payment term or how long you intend to pay the loan
• The annual interest rate of the loan. You get this from the bank where you intend to buy the foreclosed property or the bank where you intend to get financing.
• The amortization factor that corresponds to the payment term and annual interest rate. You can access a table of amortization factors here: Amortization Factors Table

Monthly amortization = Principal x Amortization factor

For example, you saw a foreclosed property being sold for Php 1 Million and you can purchase it with only 20% down payment, with a maximum payment term of 10 years, at an annual interest rate of 12%. What would be the monthly amortization you will have to pay if you bought that foreclosed property?

First determine the Principal amount. With a selling price of Php1,000,000 and a minimum down-payment of 20% which is Php200,000, the loan balance or principal would be:

=Php1,000,000 – Php200,000

=Php800,000

From the given example, the payment term is 10 years and the annual interest rate is 12%.

The corresponding amortization factor for a loan with a payment term of 10 years with an annual interest rate of 12% would be 0.01434709 which you can find here: Amortization factor rate Tables

Now let us calculate the monthly amortization payment:

Monthly amortization = Php800,000 x 0.01434709

= Php11,477.67

Want to check if this is correct? Try entering the same information in this site’s mortgage calculator which you can find by clicking here.

Keep in mind that the resulting monthly amortization payment we got above is a blended amount containing both principal and interest. If you want to determine the principal only or interest only amounts, this can be done by creating an amortization table with separate columns for interest and principal. I’ll be sharing how this can be done in another post.

I’m quite sure though that there are interest only mortgage calculators out there although I can’t say if there are any that are available for free. Do let me know through the comments section if you do find one.

Determining positive cashflow

Going back to our example above, what if you learned that the current rental rates for comparable properties in that area average at around Php12,000.00 per month? Does that mean you’ll get a positive cashflow since the average rental rates are higher than the monthly amortization? It is tempting to think so, but one should also consider vacancy rates, monthly maintenance costs, property management expenses, monthly dues to the home owners association or condo corporation (depending if the property is a house in a subdivision or it’s a condo), property taxes and other applicable taxes(VAT or percentage tax, whichever is applicable), insurance, maintenance reserves, etc.

I’ll stop for now with the monthly amortizations and I’ll just discuss these other things to consider in another post. I would not want anyone out there to feel overwhelmed.

Now what?

As they say, practice makes perfect so why don’t you try computing for the monthly amortizations for any of the foreclosed properties that you might be interested in from the various lists available in Foreclosure Philippines? If you learn how to do this, you would then be able to easily compute for the monthly amortizations of a property by hand, as long as you have enough information. It would also help if you have a printed copy of the table of amortization factors handy.

Questions? Please do leave a comment below.

Happy learning!

—

To our financial freedom!

Jay Castillo
Real Estate Investor
Real Estate Broker License #: 20056
Blog: http://www.foreclosurephilippines.com
Click here to contact me via E-mail
Mobile phone (Call/SMS): +639178843882
Twitter: http://twitter.com/jay_castillo
Facebook: Foreclosure Philippines fan page

Text by Jay Castillo. Copyright © 2009 All rights reserved.

P.S. – If you are a new visitor, please start here to learn more about foreclosure investing in the Philippines.

P.P.S – If you feel that anyone else you know might benefit from this post, please do share this to them and don’t forget to subscribe to e-mail alerts and get notified of new listings of bank foreclosed properties, public auction schedules, and real estate investing tips. If your inbox is getting full, you may subscribe through my RSS Feed instead.

How to compute monthly amortization payments without a mortgage calculator is a post from: Foreclosure Investing Philippines

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Unionbank shall be having its 142nd Special Public Auction of foreclosed properties on August 29, 2009, Saturday, 9:00AM. Foreclosed properties included in this public auction are from the Visayas and Mindanao areas. The special public auctions shall be held simultaneously at the following venues:

Bacolod
Venue: Business Inn, Lacson St.

Cagayan De Oro
Venue: The VIP Hotel, Don Apolinar Velez St.

Davao
Venue: Davao Tower Inn, Quirino Avenue

For more information, please call (02) 637-1445/ (02) 638-0125/ (0906)2108828 or send an e-mail to esbabas@unionbankph.com. You may also visit their website http://www.unionbankph.com.

Only 10% downpayment is required, with the balance payable for up to 15 years at a  fixed interest rate of 13% per annum for the first 3 years, and then at a fixed interest rate of 15% for the next 12 years. I would suggest that interested buyers secure a sample computation to avoid any surprises. You may also try using this site’s mortgage calculator to have an idea on the monthly amortizations.

Foreclosed properties included in the auction are residential, agricultural, and commercial properties and are from Bacolod, Mandalagan, Potatan Iloilo, Iloilo – Brgy. Pangi, Talisay City, General Santos City, Cagayan De Oro City, Cebu City, and Davao City.

Click here to download the complete foreclosed property listing for Unionbank’s Special Public Auction of Visayas and Mindanao  foreclosed properties.

(Source: Manila Bulletin, August 9, 2009 issue, Classifieds section)

Auction Requirements
Only Php20,000 Show Money(Cash or Manager’s Check) is required to qualify to bid for each property.

I would highly recommended interested parties to do their due diligence before bidding on any foreclosed property as all properties are for sale on an “AS-IS WHERE IS” basis.

Do take note that Creditable Withholding Tax (CWT) is for the buyer’s account so don’t forget to consider this when doing the numbers like computing for the return-on-investment (ROI) if you decide to make use of the property as a rental property for example.

*Misprints are not misrepresentations of any property.

—–

Happy Hunting!

To our financial freedom!

Jay Castillo
Real Estate Investor
REBL#: 20056
Blog: http://www.foreclosurephilippines.com
Social Network: http://foreclosurephilippines.ning.com
Mobile: +639178843882
E-mail: ph.investor@gmail.com

Text by Jay Castillo. Copyright © 2009 All rights reserved.

Unionbank Visayas and Mindanao foreclosed properties for public auction on August 29, 2009 is a post from: Foreclosure Investing Philippines

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