60 Seconds of Real Estate - How to Easily Calculate a Monthly Mortgage Payment

60 Seconds of Real Estate

Philip Rosenberg, Designated Broker of ValleyWide Property Services.

When with clients, one of the most asked questions is, “Do you have any idea how much my total monthly payment will be?”  I tell them, “Of course!”.

How do I do this math, and in my head in order to give an immediate response and hopefully a good impression?

Lets say you are going to borrow $200,000.  Your payment of principle, interest, taxes and insurance will be about $1400 or very close to that.

$250,000 will be a monthly mortgage payment of approximately $1750.

How about for $300,000?  About $2100/month.

$150,000….1050.

Simply take the number of Thousands of dollars you will be borrowing, and multiply by $7.    Borrowing $200,000?

7 times $200 is $1400/month.  The 200 stands for the number of thousands of dollars you are borrowing.

7 times 150 is $1050.  Again, 150 represents $150,000 of  borrowed money.

NOTE:  Only do this with the amount you will be mortgaging, not the price of the house.

This is not  exact, but it’s darn close.  Taxes vary with every property as do HOA fees, so usually I add another $100 to my formula to be safe.  So $200,000 mortgage goes from $1400 to $1500.

Now you, too, can easily calculate your approximate mortgage payment.