How is the monthly payment calculated?

Question

Accepted Answer

Start from the financed price, which is 20% above the cash price shown on the listing. Subtract your down payment of 5%, 10% or 20% of that financed price, and the remaining balance is financed at a fixed 10% annual interest over 10 or 15 years. For example, on a tract with a cash price of $100,000 the financed price is $120,000; with 5% down you pay $6,000, and the $114,000 balance is financed at 10% fixed for 15 years. Every listing has a calculator that shows the exact monthly payment for each combination of down payment and term, so you can compare them before you reserve.