How to Figure a Mortgage Payment – A Quick and Easy Way to Calculate Payments in Your Head

There are several ways to calculate monthly mortgage PITI payments. PITI stands for Principal, Interest, Taxes (property taxes) and Insurance (home owner’s insurance).

o You could use a long, complex formula like: P = L[c(1 %2B c)n]/[(1 %2B c)n – 1] Does that sound fun to you? Me neither.

o You can use an on-line calculator. They are all different, though. Some are good, some are not. But if you are out house shopping and do not have internet access – not an option.

o You can even use a special, hand-held realtor calculator that will prompt you step by step to enter all the variables like: home price, down payment amount, interest rate, length of the loan, etc., then it will calculate the monthly mortgage PITI payment. However, these calculators are expensive, and unless you are a realtor, you will no longer need it once you find your home or refinance – not a cost-effective option.

You need a quick and easy way to figure your payment in your head, or maybe with the calculator in your cell phone.

Believe it or not, there is a way. It is very straightforward and will give you a ballpark estimate of your PITI payment.

Are you ready for this? It is super simple – just a one step multiplication problem. OK. Here it is. To estimate your monthly mortgage PITI payment multiply the amount of your loan by .008 . That’s it…seriously! (As long as mortgage interest rates don’t change drastically from what is available in Jan 09)

o If you are going to buy a $200,000 house, and you can pay $10,000 down, 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 mortgage PITI payment will be about $1520 per month.

Be advised, this figure is only an estimate – a simple way to get an estimate when you are not able to get to a computer. If you are in contact with a realtor or loan officer, they can give you a much more accurate idea of your monthly mortgage PITI payment.

The Easy Way to Own Your Townhome

Buying a luxury town home is something that most of us dream of but only a few can afford. However, there are ways by which almost anybody with a decent income can afford to buy a town home. Many town homes are available on lease with options to buy and that makes it easier to buy your own town home – you don’t feel the pinch in your wallet.

Most of these developers offer a lease and a lease with option to buy. While you lose your ownership of the town home at the end of the stipulated period when you take it on lease; for lease with option to buy a part of the monthly payment is adjusted towards the cost of the town home and by the end of the stipulated period you can pay off the entire price of the town home and own it forever.

This is probably the easiest method to buy a luxury town home and there are several reasons to stand for it.

Bad Credit History: It is often difficult to get a loan if you are having a bad credit history or even if you have taken a loan with your good credit history any failure in debt repayment can get you a bad credit history. Lease with option to buy actually helps to avoid such situation. As the payment is relatively low it is easier for the buyer to make payment. Also the buyer gets the duration of lease period to make up / repair any bad credit history.

Saves from Inflation of Home Price: At the time of agreement the buyer and the seller agrees on a fixed price for the home. It is often observed that real estate price appreciates very fast and by the end of the lease period the price of the home might be higher than the previously agreed price. This becomes a major advantage for the buyer as he still gets the home at previously agreed price and has the option to sell it off at the appreciated value.

Try Before Buy: On a lease with option to buy, the buyer gets to stay in the home during the lease period and this helps him to understand if he is comfortable in that home. At the end of the lease period he goes for the purchase option if he is comfortable with staying in that home.

Low Maintenance Cost: The buyer do not need to pay the maintenance cost during the lease period, it is born by the seller. The buyer just pays the lease amount. This becomes a substantial saving over the entire lease period. After the buyer finally takes the ownership of the home then he starts paying the maintenance charges like repair, insurance and property tax.

These days increasing number of realtors and developers are offering lease and lease with option to buy for luxury homes and townhomes. Reputed companies like Mocking Bird Properties are also offering townhomes for lease in Plano Texas. This is high time you take advantage of this easy lease with option to buy method to get your own townhome.