To work backwards to find realized income needed from a given mortgage payment amount, you use _____.
To work backwards to find realized income needed from a given mortgage payment amount, you use the following steps:
1. Determine the mortgage payment amount: This can be obtained from the loan agreement or by using a mortgage payment calculator.
2. Subtract the estimated property taxes and insurance: In some cases, the mortgage payment includes taxes and insurance. If that is the case, subtract those amounts from the total mortgage payment to isolate the principal and interest portion.
3. Calculate the interest rate: Determine the interest rate associated with the mortgage. This can be found in the loan agreement or by checking with the lender.
4. Use an amortization calculator: Utilize an amortization calculator to estimate the loan balance at the time of the mortgage payment. The remaining mortgage balance will decrease over time as payments are made and interest is accrued.
5. Calculate the realized income needed: Subtract the projected remaining mortgage balance from the estimated property value. The difference will represent the amount of realized income needed to cover the mortgage payment.
By following these steps, you can work backwards to find the realized income needed from a given mortgage payment amount.