Calculating monthly payments.....

Hi everyone,

How would you calculate monthly payments?

example:

I bought a \$190.000 Home. With a 5.9% rate. 30 year loan. How would I calculate my monthly payments?

Alex,

Go to a Real Estate website like Century 21, or Re/Max. Many of them have Payment calculators that you can use for free. Also, some of the RE Course you can buy will include one of them with the course.

Here is you payments calculated for the loan \$190,000 @ 5.9% for 30 years:

\$1126.96 per month.

This does not take into consideration Association dues, taxes and insurance.

Hope this helps

brian 8)

Hey , Im a mortgage broker so this is my job. If you purchased the home already and you are till trying to figure out your payments then you may read the note you signed. If you are just trying to get an estimate then search the web for real estate calculators and it will give you a bunch of hits for you to try out.
Also be aware that if you are getting an interest only loan then all you do is multiply the interst rate by the purchase price
(190000)(.059)
then divide the answer by 12

Hi your payment would be \$1126.96 with out taxes and insurance.

All the best
Paul J. Da Costa

If you just want a quick and dirty estimating guide, use this rule of thumb.

The payment on a \$100K loan at 6% for 30 years is about \$600. This means that the monthly mortgage payment is \$6 for each \$1000 borrowed.

To use this in your case, divide your loan amout by 1000 (result = 190), then multiply your result by \$6 to approximate your monthly loan payment (190 x \$6 = \$1140).

Note: this rule of thumb is only valid for 30 year amortizing loans with a fixed rate near 6%. For each quarter point increase in the interest rate, add \$0.16 to the multiplier. So, for a 6.25% rate, the multiplier will be \$6.16 per thousand.

Thanks for all the reply guys. Yes my mortgage payments is around that much. But the question is if I pay \$1,400 every month for 30 years, that is \$504,000. Is that about right? Or, does the payments go lower after awhile?

Your pymt will stay the same if you took a 30 yr fixed rate . Now you know way people take an adjustable mtg. If you plan on selling it in the next 5 yrs you would be better with an ARM at 15 yrs or Intrest only.

So basically your saying I will be paying \$314,000 of interest with a 30 yr fixed rate loan???

No one said that. You have to tell us how you got to that number.

For a \$190K amortizing loan for 30 years at a fixed rate of 5.9%, you will pay \$405,705 to retire this loan in exactly 30 years. Of that amount, \$190K will be the loan principal and \$215,705 will be the total interest paid over the life of the loan.

Compare this to the interest only loan at 5.9% over 30 years. You will pay \$526,301 to retire this loan in exactly 30 years – \$190K principal and \$336,301 in interest.

Early he said his pymt is \$1400. 1400x360= 504,000-190,000=314,000 that is how he got his numbers. An interest only loan is great if you are going to keep it for a short time.5 yrs or less. If you are going to be in a loan longer than that a 15 yr arm is your best bet if you can handle the pymt.

I thought that might be the case.

I had hoped that Alex would tell us that the \$1400 was PITI so that he could realize that his tax and insurance escrows are not part of his debt service, consequently not part of the interest, and therefore, not part of the total cost of his financing.

What I don’t understand is the lender said my interest would be \$11,210 on a \$190,000 loan with a %5.9 interest rate. But \$1400 every month for 30 yrs, would not equal to the interest rate of \$11,210.

Alex take \$190,000x.059=\$11,210.00 this is for one year of interest.

OK. I think i understand now. \$11,210 is just for 1 year interest. \$11,210 x 30yrs = \$336,300. I thought it was just \$11,210 for 30 yrs. Thanks guys for your help

Be clear on the loan product you are discussing with your lender. Your original post did not tell us whether you were asking about an amortizing loan or an interest only loan.

Because I don’t think you completely understand a few points, let me recap.

Be aware that monthly “mortgage” payments often include payments toward your hazard insurance and your property taxes. These payments are escrowed by your loan servicer to pay the annual insurance premiums and property tax bill, and are amounts paid each month in addition to your debt service. The mortgage broker may express your monthly payment with the term “PITI”. This abbreviation stands for Principal, Interest, Taxes, and Insurance. Principal and Interest are your debt service – your loan payment, while the Taxes and Insurance are escrow payments. This may explain why the mortgage broker is estimating a \$1400 monthly payment while we were telling you that your (amortizing) loan payment will be slightly over \$1100 per month.

An amortizing loan has a monthly payment that includes both interest and principal payments so that your loan is completely paid off by the end of the loan term.

An interest only loan has a monthly payment that is applied to the interest only with nothing toward the principal. At the end of the loan term you will still have to make a single lump sum payment of the entire loan amount.

The total amount of interest paid each year and over the life of the interest only loan will be greater than with the amortizing loan.