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If you just want to see your monthly payments, you enter just the loan type and amount. You can leave the other fields as is or blank. Your spreadsheet will contain the correct numbers for the monthly payment, principle, interest and payoff balance.

We have built our home ownership calculator to answer two questions financially. First, should you buy or home or rent an apartment? Second, which loan is better if you were to sell the home after some number of years? The answers to these two questions are in the outputs of the calculator, obviously.

The first question is answered by the "amount over rent" and the "break-even amount" columns in the output. The "amount over rent" is the difference between the monthly expense of owning and renting, i.e. mortgage minus rent, adjusted for taxes, repairs, rent increase, rent that you collect from your new home, etc. You can even adjust for utility bills and such by modeling them as part of the rent or non-deductible expense. The accumulation of these "amounts over rent", adjusted for your ROI, plus the pay-off amount is the "break-even amount." Basically it is the amount of money you would have in the bank if you had not bought the home. (This amount depends on the mortgage. Technically, if you do not buy a home, the amount of money in the bank is the same regardless of the mortgage. That is why we prefer to calculate the "break-even amount" and explain it as the amount you have spent plus the amount you owe given the loan you have).

The second question of comparing loans is answered by the same "break- even amount" column. When you are ready to sell your home, this amount, taxes, prepayment penalty and realtor fees determine your minimum selling price, as we explained in the introduction. However, you might want to look at the other columns to make sure you can afford each loan. For example, obviously the sum of your monthly payment, taxes and expenses must fit under your monthly budget. And if you plan to buy a car, you must make sure you have enough spare cash. The smaller the difference is between the break-even amount and the payoff amount, the more spare cash you have.


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