There are several ways to calculate your monthly mortgage PITI payments. PITI stands for Principal, Interest, Taxes (property taxes), and Insurance (homeowner’s insurance).
o You could use a long and complex formula like: P = L[c(1 %2B c)n]/[(1 %2B c)n – 1] Sounds like fun? Me neither.
o You can use an online calculator. However, they are all different. Some are good, some are not. But if you’re out shopping and don’t have internet access, that’s not an option.
o You can even use a special hand calculator for real estate agents that will step you through inputting all the variables like: home price, down payment amount, interest rate, loan length, etc., then it will calculate the monthly payment of the PITI of the mortgage. However, these calculators are expensive, and unless you’re a real estate agent, you won’t need them anymore once you find your home or refinance; it is not a profitable option.
You need a quick and easy way to calculate your payment in your head, or maybe with the calculator on your cell phone.
Believe it or not, there is a way. It’s very simple and will give you a rough estimate of your PITI payment.
Are you ready for this? It’s super simple: just a one-step multiplication problem. OK. Here it is. To calculate your monthly PITI payment on your mortgage, multiply your loan amount by .008. It is for real! (As long as mortgage interest rates don’t change drastically from what was available on January 9)
o If you are buying a $200,000 home and can afford a $10,000 down payment, your loan amount will be about $190,000.
o The math looks like this: $190,000 x .008.
o Plug those numbers into your calculator.
o Your monthly PITI payment on your mortgage will be approximately $1520 per month.
Please note that this figure is only an estimate. – an easy way to get a quote when you can’t access a computer. If you are in contact with a real estate agent or loan officer, they can give you a much more accurate idea of your monthly mortgage PITI payment.