By PETER ROSENTHAL, President

V.I.P. Trust Deed Company

Q: We are presently shopping for a house in Burbank. We have been quoted different mortgage rates by a couple of lenders, depending on the amount of points that we pay up front. In addition, there are different rates for 15 year loans and 30 year loans. Our real estate broker always gives us the proposed monthly payment when asked. Is there a simple formula to figure out a mortgage payment using a regular calculator?

A: The monthly payment on a simple interest, fully amortized mortgage or car payment cannot be figured out using a $5 calculator, however this can be done with a FINANCIAL calculator. These calculators are relatively inexpensive and can easily be purchased locally. However, you are in luck today, because every year or so I offer a free copy of the V.I.P. Handy Dandy Factor Table. This table easily and quickly figures out your monthly payment on almost any conceivable fully amortized loan. Using this table and an inexpensive calculator, you can figure out your payment with one multiplication. Frankly, this is much quicker than using a financial calculator.

As I write this answer, the approximate rate for a 30 year mortgage is 7.25% and the approximate rate for a 15 year mortgage is 7%. Here’s how a factor table works. A factor is merely a cost per thousand dollars for the specific interest and term you want, using a complicated formula, not the simple one you requested. The factor for a 7.25% 30 year loan is .0068218. The factor for a 7% 15 year loan is .0089883.

If you are buying a house for $200,000 with $40,000 down, the loan amount is $160,000. Merely multiply $160,000 times .0068218 to figure the payment on a 7.25% 30 year loan. $160,000 X .0068218 = a monthly payment of $1,091.49. If you wish to figure out the monthly payment on a 15 year loan at 7%, you merely multiply $160,000 X .0089883 = $1,438.13. Figuring the payment is a cinch once you know the factor. The V.I.P. Factor Table covers amortized loans from 4% interest to 26% interest and from 1 to 40 years in duration. I will be happy to send you a copy of this schedule at no cost. Merely send me a stamped, self-addressed envelope with the comment “factor table.” My office will be happy to send this to you within a few days with my compliments.

Peter Rosenthal

VIP Trust Deed Company