You can calculate an approximate interest-only payment in the following way: Multiply the dollar amount advanced on the loan by the interest rate expressed as a decimal, and then divide that amount by 12.
How do you calculate construction interest?
- Interest Reserve = ((50% x Loan Amount x Interest Rate) / 12) x Months of Construction.
- 50%: is a rough estimate of the average outstanding loan proceeds over the entire construction period.
What does 90% LTC mean?
Some lenders use this to tell us the percentage of funding one can expect on a purchase. Sometimes this is regulated by the state. For instance, if a lender tells you that they loan 90% LTC, you can expect to receive a loan of 90,000 when your purchase price is 100,000.
How do you calculate real estate loan amount?
Loan-to-value (LTV) is calculated simply by taking the loan amount and dividing it by the value of the asset or collateral being borrowed against. In the case of a mortgage, this would be the mortgage amount divided by the property's value.
What is the formula for construction estimate?
The cost of construction depends on the quality of material as well. Higher the quality, the higher the prices. The basic formula to calculate construction cost per square feet is: Cost of construction = area of plot x construction rate per sq ft.