Which number to use for PV on a financial calc

7 Replies

3 year Loan 33 months remaining. Payment of -$950.67 per month with UPB of $29000. Getting the note at a discounted price of $23000.

When i calculate my returns on a financial calculator, which one should be my PV ? (UPB or the discounted note price)

Reason i am getting confused is, i pay a discounted price for the note but the pay back is on the UPB. (Typical newbie question eh ? :P )

I generally look at investment yield rather than IRR for notes. I get a yield of 23.317%, using 33 payments of 950.67 with a 23K investment. If you are using a servicer, you may want to find your actual yield by using an adjusted monthly payment which removes the monthly servicing charge, i.e., the net payment to you.

Well, you wouldn't use PV to find your return.  You would use RATE.  

In order to solve for PV you need a rate as an input.  

So you would be calculating either the loan balance or the investment balance depending on which rate you use - either the return rate or the interest rate.  Not what you are looking for.

In the RATE calculation the PV is your purchase cost if you are looking to solve for your IRR.

Your rate of return per period is as stated above 1.94% or 23.32% annual.  That is also your IRR.  

Hi my mame is Jaroslav and i am first time loan buyer.I have purchased a non performing loan for $2500 with UPB $60000 and house value $79000 in Ilinois Chicago and my Ofer been accepted.Whats my biggest concern is the area where the house is. Can anyone help me,how to research area before purchasing the loan, I mean like the are is not dangerous, bed,ugly not many crimes. Thank you