Mortgage Tool User Guide

A year ago, my wife and I were looking at houses to buy. I'm not a mortgage expert, but I am a believer in "if it's worth doing it's worth overdoing with Excel." so I built us an Excel tool. We analyzed buying vs. renting, decided what size house we could afford, and compared loan offers.

For my first foray into using Microsoft Excel's Webapp, I've published a cleaned up version of my mortgage tool here. If this works well I'll clean up & publish part two (comparing loans offers) and part three (deciding whether to buy down points).

Most of the tool is straightforward; a few pieces need more explanation.

• Closing Costs paid by seller
• Sometimes as part of the negotiation the seller agrees to pay some of the buyer's closing costs. I recommend leaving this at zero unless you have already made an offer and asked the seller to pay closing costs.
• Using Redfin?
• Redfin is an online real estate company. They refund "up to half" their commission to their buyers. 
• They also run an informative house-buying class complete with free pizza and beer.
• Other Loan
• Buyers who don't have a full 20% down payment should consider reaching out to friends or family for help. Use this section to enter the terms of any down payment help you might be able to get.
• Savings Cushion
• Maybe you want to have a few bucks lying around somewhere after you finish buying a house

• Effective Rent
• I needed a way to easily compare purchasing to renting; I came up with effective rent. 
• When you rent a place, you pay rent and in return you get a place to live.
• When you buy a place, you pay a mortgage and in return you get a place to live and you get equity in your house. 
• The portion of your mortgage payment that doesn't get added to the equity in your house (taxes, insurance, interest) is effective rent. It's the portion of your mortgage that's going away forever, like rent.