There are several ways to calculate PITI monthly mortgage payments. PITI stands for conductor, interest, taxes (property taxes) and insurance (homeowner’s insurance).
o You can use a long and complex formula like: P = L[c(1 %2B c)n]/[(1 %2B c)n – 1] Does this sound fun to you? me too.
o You can use an online calculator. They are all different, though. Some are good, some are not. But if you’re shopping outside the home and you don’t have an internet connection – that’s not an option.
o You can even use a private and portable realtor calculator which will prompt you step by step to enter all the variables like: house price, down payment amount, interest rate, insurance length etc. Then it will calculate your monthly mortgage payment PITI. However, these calculators are expensive, and unless you’re a realtor, you won’t need them anymore once you find or refinance your home – not a cost-effective option.
You need a quick and easy way to see your payments in your head, or perhaps with the calculator in your cell phone.
Believe it or not, there is a way. It is very simple and will give you a rough estimate of your PITI payments.
Are you ready for this? It’s very simple – it’s just a one-step multiplication problem. OK. there he is. To estimate your monthly mortgage payment, multiply the insurance amount by .008. That’s it… seriously! (As long as the mortgage interest rates do not change significantly from what is available on January 09)
o If you are going to buy a $200,000 home, and you can pay out $10,000, the insurance amount will be about $190,000.
o The math looks like this: $190,000 x .008.
o Enter these numbers into the calculator.
o Your monthly PITI mortgage payments will be approximately $1,520 per month.
Please note that this number is only an estimate – Simple way to get an estimate when you can’t reach a computer. If you are in touch with a realtor or insurance officer, they can give you a more accurate idea of your PITI monthly mortgage payments.