Compute the Effective Rate on a mortgage.
The total funds borrowed is assumed to be Mortgage
Principal applied to the purchase price ("applicable mortgage") plus Fees.
The Effective Rate is the Internal Rate of Return deriving the resulting Monthly Payment
on the applicable mortgage funds.
Origination fees and appraisal fees
are assumed to reduce amount of funds advanced for purchase, thereby requiring additional cash on closing.
Mortgage insurance fees are amortized over the life of the mortgage. If there are no fees or insurance on the mortgage
origination, the Effective Rate equals the Stated Rate.