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This calculator was developed for a business called Private Lenders Club.
Some of the Private Lenders Club Members specialize in the purchase of existing mortgages at a discount.
These Members are offering to purchase an existing mortgage at a price that equates to the present value of both the remaining mortgage payments (cash flows) for the balance of the term and the balance of the existing mortgage at the end of term at their requested yield rate.
The discounted yield rate will definitely be greater than the interest rate (Stated Annual Rate) registered in the original mortgage document.
If you are involved in the purchase/sale of a mortgage then this is the calculator that you will need.
Obtain the original mortgage data, determine the number of mortgage payments remaining in the term and apply the investor’s requested yield rate.