Mortgage Payment | How To Figure It Out

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Mortgage Payment Sheet


Hey Guys!

I want to show you how to figure out your monthly mortgage payment. I get a lot of people that come into the office and they are not exactly sure how to figure out their mortgage payment and a lot of times people see things on the internet where it will show just part of your monthly mortgage payment. I want to show you how to figure out your entire mortgage payment.

Now we’re going to do today is an FHA loan, 30 year, Fixed Rate Mortgage. Now your mortgage payment is made up of PITI and that’s Principle-Interest-Taxes and Insurance.

There are two different types of insurances. You have your mortgage insurance which is the insurance that FHA gives to your lender. FHA does not lend money. They just insure the loan so whether its from Bank of America, Wells Fargo or whatever lender, FHA will insure that that lender will get their money if there is a default. They will get a percentage of that money. The other insurance is your hazard insurance and that’s for fire, theft or flood and things like that.

Now if we get a loan amount of $285,000 and an interest rate of 5.25% and taxes of $5,200. In this example with the 5.25% interest rate, below you will get an example and it will have a table of that factors. The factors will be used to compute the monthly mortgage payment. The 5.25% we use the factor of .00552 and if we start with the example of $285,000, that number is multiplied by that factor .00552 and you get a principle of interest payment of $1,573.20.

Next, you take the property taxes and you divide that out by 12 and you get $433.33. Then the mortgage insurance has a factor that is multiplied times the loan amount and that mortgage insurance factor is .0115 and we divide that out over a 12 month period to get $273.13.

Next you have your hazard insurance. Now this depends on the value of the home and also the contents in it and how much you want to insure the home for but in this price range it usually run somewhere about $70.

Now if we add up these total amount we get a monthly payment of principal-interest-taxes and insurance of $2,349.66.

As I said before you will get an example of this example below and have an example at the bottom so that you can figure out your own monthly payment. So when you get a property and if you have the taxes on the property you should be able to get a good idea of what your monthly payment will be.

Now, if you have any questions or anything, please feel free to give me a call at my office. You can speak with either myself or one of the agents there and we will be glad to answer any and all questions that you have. Until next time… Happy house hunting![/text_block]