Question

You have just signed a contract to purchase your first house. The price is $160,000 and you have applied for a $100,000, 24-year, 4.6% loan. Annual property taxes are expected to be $5,509. Hazard Insurance costs $600 per year. Your car payment is $150, with 31 months left. Your monthly gross income is $4,225. What is your monthly payment of principal and interest?

You have just signed a contract to purchase your first house. The price is $210,000 and you have applied for a $110,000, 25-year, 6.3% loan. Annual property taxes are expected to be $5,617. Hazard Insurance costs $691 per year. Your car payment is $325, with 27 months left. Your monthly gross income is $4,700. What is your monthly PITI (principal, interest, taxes, and insurance)?

Answer 1

You have just signed a contract to purchase your first house. The price is $160,000 and you have applied for a $100,000, 24-year, 4.6% loan. Annual property taxes are expected to be $5,509. Hazard Insurance costs $600 per year. Your car payment is $150, with 31 months left. Your monthly gross income is $4,225. What is your monthly payment of principal and interest?

Monthly payment of principal and interest on loan can be calculated with the help of following formula

PV = PMT * [1-(1+i) ^-n)]/i

Where,

Present value (PV) of loan amount =$100,000

PMT = Monthly payment of principal and interest =?

n = N = number of payments = 12 *24 years = 288 payments

i = I/Y = interest rate per year = 4.6%; therefore monthly interest rate = 4.6%/12 = 0.38% per month

Therefore,

$100,000 = PMT* [1- (1+0.38%) ^-288]/0.38%

= $574.06

Therefore your monthly payment of principal and interest is $574.06

You have just signed a contract to purchase your first house. The price is $210,000 and you have applied for a $110,000, 25-year, 6.3% loan. Annual property taxes are expected to be $5,617. Hazard Insurance costs $691 per year. Your car payment is $325, with 27 months left. Your monthly gross income is $4,700. What is your monthly PITI (principal, interest, taxes, and insurance)?

PITI is a mortgage payment that is the sum of monthly principal, interest, taxes and insurance.

PITI = monthly principal and interest payment + monthly property tax payment+ monthly insurance premium payment

Monthly payment of principal and interest on loan can be calculated with the help of following formula

PV = PMT * [1-(1+i) ^-n)]/i

Where,

Present value (PV) of loan amount =$110,000

PMT = Monthly payment of principal and interest =?

n = N = number of payments = 12 *25 years = 300 payments

i = I/Y = interest rate per year = 6.3%; therefore monthly interest rate = 6.3%/12 = 0.53% per month

Therefore,

$110,000 = PMT* [1- (1+0.53%) ^-288]/0.53%

= $729.04

Therefore monthly payment of principal and interest is $729.04

Monthly taxes = Annual property taxes /12 = $5,617/12 = $468.08

Monthly insurance premium = Hazard Insurance costs per year/12 = $691 /12 = $57.58

Therefore, PITI = $729.04 + $468.08 + $57.58 = $1,254.71