This is how a lease option should work: After securing the go-ahead from a mortgage broker and before moving in, your potential buyer will give you a healthy, nonrefundable deposit to go toward the down payment of the house -- typically, 3 to 5 percent of the purchase price.
The amount of interest that accrues on your loan is determined by a simple daily interest calculation: Your current principal balance Ã The number of days since your last payment Ã Interest rate factor = interest rate Ã· 365.25 (number of days in a year) = Your daily interest rate.
The loan payment calculation for an interest only loan is easier. Multiply the amount you borrow by the annual interest rate. Then divide by the number of payments per year. Example (using the same loan as above): $100,000 times .06 = $6,000 per year of interest. 6000 divided by 12 equals $500 monthly payments. Assuming you never pay down any of the principal balance, your monthly payment will remain the same going forward.