Are You a Mathmatics Genius or Not?
With This Little Trick, You're Going to Sound Like One.
Imagine calculating a principal, interest, tax and insurance payment for that home you're considering faster than you can find the right app on your phone.
It's actually pretty simple.
Here's the formula to use: Sales Price x 1% divided by 2
Example 1: Purchase Price = $250,000, taxes are $2,500, loan amount w/ 20% down is $200,000 at 4.50% on a 30-year fixed rate loan, insurance is $600 per year.
That's a lot of math to do, but let's try our formula:
$250,000 x 1% = $2,500, $2,500/2 = $1,250.
What's the actual payment given the real math in this instance? The answer is $1,272, a mere $22 a month difference.
Example 2: Purchase Price = $300,000, taxes are $3,375, loan amount w/ 20% down is $240,000 at 4.50% on a 30-year fixed rate loan, insurance is $720 per year.
$300,000 x 1% = $3,000, $3,000/2 = $1,500.
What's the actual payment given the real math in this instance? The answer is $1,557, just a $57 per month difference.
Example 3: Purchase Price = $500,000, taxes are $5,625, loan amount w/ 20% down is $400,000 at 4.50% on a 30-year fixed rate loan, insurance is $1,200 per year.
$500,000 x 1% = $5,000, $5,000/2 = $2,500.
What's the actual payment given the real math in this instance? The answer is $2,595, just $95 a month difference.
The results will vary a little based on rates, down payment, taxes, mortgage insurance, etc. However, once we've shown you the actual math for your situation, you can just add or subtract a little from the formula to compensate for any differences as they apply to you.
Reach out so we can calculate a sample for you. We're happy to help.
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