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B, I can't figure out the payment right off the top of my head. I have a calculator that can figure the total amount OR we can call the loan officer that has you prequalified.  So you will be putting down 20K?

"My Buyer, I need to know a little more information.  Are you interested in a 15, 20 or 30 year mortgage?  Do you want an FHA or conventional loan? Are you a Veteran and if you are, have you ever used your eligibility?  You may want to consider using USDA because you can finance your closing costs in with the loan if the property meets the eligibility requirements.  Also, the mortgage insurance for an FHA loan is more expensive than for a conventional loan and there is no mortgage insurance with a VA loan, all of which will impact the amount of your payment. Tell me, what is your comfort level for your new house payment? Mr. Buyer, you asked an excellent question, but it is not an easy question to answer.  There are a lot of variables that go into it.  It appears this property has everything you're looking for with 7 of the 9 things you can't live without.  Let's put the numbers together and see if we can make this work for you and your family." 

I'm a Realtor and the Principal Loan Originator for Helen B. Marshall & Company and this is exactly how I answer this question in real life.  It may appear to be overkill, but it instills confidence in my Buyers that they are working with more than just the typical sales associate/Realtor.

Ron I’m a real estate broker and former mortgage loan officer. I would combine B & C with an answer like:

Somewhere in the neighborhood of $1500 but only the loan officer who has pre-approved you can lock in the rate and give us a good faith estimate.

IMHO there are problems and / or weakness in A, B or C as stated if used alone.

I remember from my days as a lender, the agent can create problems or put the lender in a spot of having to make the agent look bad if the agent gets too specific on payment quotes. Especially since a rate hasn’t been locked in yet.

Ron,

The lender won’t lock the rate until there is an executed contract. Yes the pre-approval letter has a rate quote but that isn’t a lock.

Another common scenario is that most buyers don’t make the decision whether they are going are going to pay an origination point or not pay it in exchange for a slightly higher interest rate until after we get a contract.

Once we have a contract, then we find out if “promised” gift funds from family are actually going to come through. Buyers often find out that “we’ll help you” isn’t as much as they thought or they decide they would rather not have the help if they can swing it on their own. That often impacts whether they pay the origination point or not.

I also often advise buyers not to make that decision until after we have done inspections so they have a better idea of what their anticipated repairs in the coming months are going to be. Today that AC unit works so we can’t ask the seller to repair or replace it but at 15 years old we know it will have to be replaced soon. And no, having a home warranty company throw a cheap compressor in a 15 year old unit isn’t the answer. Some time deficiencies are that obvious but sometimes they aren’t. We don’t know until we can get in and take a complete look.

Your exact payment also includes insurance. Here again I advise a client to contact their insurance company before we make an offer but they don’t always do that or we find a house over the weekend. In the Texas Gulf coast market where we have homeowners, windstorm and flood, insurance quotes can vary widely. In fact sometimes insurance is even hard to get. The cost of flood insurance can vary depending on whether we can transfer an existing policy or have to originate a new one.

So, sometimes if we have been looking at a house over say a week and the buyers were really staying in touch with their lender and insurance agent, I could quote them a payment within a few dollars a month. But more often than not, in my markets, it is better to give them a rounded number, around $1,500 a month and then quickly get the data we need from the lender, insurance agent and inspector.

I’m not saying that quoting an exact payment is illegal, immoral or fattening :-) If I’m working with serious buyers giving a more general answer and then doing the due diligence to get the correct payment amount has always worked better for me when I was a lender and as a broker. And my lenders appreciate that I haven’t quoted a number they have to work around or that makes one of us look bad or have to make the other look bad.

Ron:  I usually tell the buyers what my rough estimate of their PITI would be but only their lender can give them the exact amount.  If it's within the range they were thinking then lets go far it! 

Ron: I am a Realtor...Though a combination of Choice A&C seems to be reasonable, they are problematic in the  sense that they both make assumptions...the buyer chooses a 30-yr mortgage. Also that it is not a VA Loan 

180K, 5% for 30yr, P&I - $966.66

180K, 5% for 15yr, P&I - 1423.49

My approach would be this:

Mr. buyer, that is a very good question.  A good lender can tailor a loan to meet your needs providing you have met a series of qualifying criteria.  As your REALTOR, I can provide you an estimate, which I will, but I would suggest that we get you setup for an appointment immediately, you will need a preapproval letter to write an offer. 

The answers I will provide depends on several variables, among which are whether ore not you are considering a 15 yr or a 30 yr mortgage? the type of loan, the cost for, insurace, etc. Here is a starting point...for the 30 yr P&I= $966.66, for the 15 yr P&I - 1423.49.