You have your Good Faith Estimate and after your down payment and your fees, your mortgage...

You have your Good Faith Estimate and after your down payment and your fees, your mortgage balance is $175,000. You are approved for a 30 year loan at a 4% rate. Your mortgage provider says your escrow balance will be $150 a month and you do not need PMI. What is your monthly mortgage payment?

Expert Solution

Formula sheet

A	B	C	D	E	F	G	H	I	J	K
2
3		Escrow payment will be saparately paid in escrow account to ensure payment of property taxes and insurance.
4		Therefore total monthly mortgage payment will be monthly payment on loan plus the monthly escrow payment.
5
6		Calculation of monthly Payment on Loan Amount:
7		Monthly payment can be calculated using PMT(RATE,NPER,PV,FV,TYPE) function in Excel as follows:
8
9		Given the following data:
10		Loan taken	175000
11		Duration of mortgage	30	Years
12		Interest rate	0.04
13
14		Monthly Payment can be calculated as below:
15		RATE (Montly interst rate):	=D12/12
16		NPER (No of Months):	=D11*12
17		PV (Loan Amount):	=-D10
18		FV	0
19		TYPE	0
20		Monthly Payment	=PMT(D15,D16,D17,D18,D19)	=PMT(D15,D16,D17,D18,D19)
21
22		Hence Monthly Payment on loan is	=D20
23		Monthly escrow payment required	150
24
25		Total monthly mortgage payment	=D22+D23	=D22+D23
26

jeff jeffy answered 2 years ago

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