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John Mattson
Member
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Posted: Thu Mar 27th, 2008 12:23 am |
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Based on the terms of the loans the County will receive as stated in this morning's Messenger, I ran some numbers through an on-line Mortgage Payment Calculator provided by TimeValue Software (c)2008.
Below you can see how I came to the figures, but please don't just take my word and run the figures yourself. I also compared the figures with other on-line mortgage calculators and came up with the same or similar results.
(If you don't want to read all the data, scroll to the bottom for the recap)
Also, if somone can provide a better, more clear understanding, please make it available to the public.
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First, the $9 Million 5-year Balloon Loan (the Messenger did not state the Amoritication period of this loan so I used 35 years since that is how long the $7 Million loan will be financed. Also, at 30 years, the figures are slightly Higher):
How much will my payments be for a balloon mortgage?
The term of a balloon mortgage is usually short (e.g., 5 years), but the payment amount is amortized over a longer term (e.g., 30 years). An advantage of these loans is that they often have a lower interest rate, but the final balloon payment is substantial. This calculator computes the payment amount necessary for a mortgage with a balloon payment, using monthly interest compounding and monthly payments.
Home (Loan) Price: $9,000,000.00
Amoritized Over: 35 Years
Balloon Payment After: 5 Years
Interest Rate: 1%
Your monthly payment amount will be $25,405.71 ($304,868.52 a year)
Your balloon payment amount will be $7,924,221.57
Financial Details
Total amount financed: $9,000,000.00
Payment amount: $25,405.71
Balloon payment: $7,924,221.57
Total payments: $1,498,936.89
Interest rate: 1.000 %
Total interest: $423,158.46
Total Payments is calculated to 59 months rather than 60 as the initial payment would be the first day of the second full month after the paperwork is completed.
Now, the $7 Million Fixed Loan that will be received to pay off the first $9 Million Balloon Loan:
How much will my fixed rate mortgage payment be?
This calculator computes the payments (principal and interest) for a fixed rate loan, using monthly interest compounding and monthly payments.
Home (Loan) Price: $7,000,000.00
Loan Term: 35 Years
Interest Rate: 4.375%
Your payment will be $32,588.17 ($391,058.04 per year)
Financial Details
Total amount financed: $7,000,000.00
Payment amount: $32,588.17
Total payments: $13,687,033.53
Interest rate: 4.375 %
Total interest: $6,687,033.53
So, how much will our $12 Million courthouse really cost the people of Morgan County???
Between the $9 Million Ballon and the $7 Million Fixed loans we will pay:
Total Payments will equal: $15,185,970.42
Total Finance Charges (Interest) will equal: $7,110,191.99
The Annual Increased Tax the County will receive and is currently receiving is, $325,000, which covers the 5-years worth of payments towards the $9 Million loan and will actually provide a surplus of $20,131.48 ($100,657.40 over the 5-years)
However, that same $325,000 Annual Tax will not cover the annual payments of $391,058.04 required by the $7 Million loan. This loss totals -$66,058.04 each year or $2,312,031.40 over its 35-year life span. This negative balance will have to be made up in some other way. Perhaps the current Commissioners would like to go ahead and rase taxes some more just in case? (being sarcastic here  )
Difference of $7 Million payments vs. Income minus the $9 Million payments: $2,211,374.00.
Now we can't forget the $924,221.57 negative balance for the balloon payment which the $7 Million loan itself will not cover.
So, a simple talley:
$4,000,000.00 (Insurance and other charitable income on hand)
$3,000,000.00 (Architect Design and Planning - Conservative figure I'm sure)
$15,185,970.42 (Total Payments)
$7,110,191.99 (Interest)
$7,000,000.00 (Primary Loan)
$1,075,778.43 (Difference in $9 Million loan and the Ballon repayment of
$7,924,221.57)
$37,371,940.84 (GRAND TOTAL - at least a very good estimate)
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