FE
October 31st 03, 09:57 AM
Hi,
How do you forecast interest on a HELOC withdrawl?
If you've had one of these, you know that they are not amoritized like a
regular mortgage loan. Plus, it does not appear to be as simple as
multiplying the daily periodic rate by the principal outstanding, since the
principal decreases. Another added complexity is that the interest rate is
variable. (In my case, it started out at 3.99%, and it is now 3.74%.)
For example, let's say I make a $50,000 draw on our HELOC to buy an
investment home. Let's also say I think it will take 3-5 months to fix up
the property then resell it. I want to know approximately how much I will
pay in interest on the withdrawl over the course of three months, or four
months, or five months, etc.
My great hope is to include a HELOC interest forcast in a spreadsheet so
when I'm analyzing a property to decide if I should buy it, I will be able
to forecast all expenses -- including interest expenses on the HELOC.
The forecast doesn't have to be perfect (with a variable interest rate, I
don't know if it's possible to be perfect), just close enough to give me a
ballpark so I can make a reasonable prediction.
I've asked my bank for help (Bank One in AZ), but I get the feeling that
they don't know how it's done. But SOMEONE at the bank knows how, because I
get a statement every month requesting payment!
If you know of a document or a web site that could help me, that would be
wonderful. Or, if you can explain it to me in this newsgroup, I will
request that you be Sainted.
Thank you for reading this loooooooooong message.
FES
How do you forecast interest on a HELOC withdrawl?
If you've had one of these, you know that they are not amoritized like a
regular mortgage loan. Plus, it does not appear to be as simple as
multiplying the daily periodic rate by the principal outstanding, since the
principal decreases. Another added complexity is that the interest rate is
variable. (In my case, it started out at 3.99%, and it is now 3.74%.)
For example, let's say I make a $50,000 draw on our HELOC to buy an
investment home. Let's also say I think it will take 3-5 months to fix up
the property then resell it. I want to know approximately how much I will
pay in interest on the withdrawl over the course of three months, or four
months, or five months, etc.
My great hope is to include a HELOC interest forcast in a spreadsheet so
when I'm analyzing a property to decide if I should buy it, I will be able
to forecast all expenses -- including interest expenses on the HELOC.
The forecast doesn't have to be perfect (with a variable interest rate, I
don't know if it's possible to be perfect), just close enough to give me a
ballpark so I can make a reasonable prediction.
I've asked my bank for help (Bank One in AZ), but I get the feeling that
they don't know how it's done. But SOMEONE at the bank knows how, because I
get a statement every month requesting payment!
If you know of a document or a web site that could help me, that would be
wonderful. Or, if you can explain it to me in this newsgroup, I will
request that you be Sainted.
Thank you for reading this loooooooooong message.
FES