Question

Find the monthly PITI payment for a mortgage of $93,500 at a rate of 9.25% for 25 years with annual property taxes and hazard insurance premium of $3,750 and $687 respectively.

Answer 1

Mortgage or loan = $93500 , Rate of interest = 9.25% , Period of loan = 25 years

As mortgage payments are made monthly, therefore

Monthly rate = Rate of interest / 12 = 9.25% / 12

No of months of loan = 12 x no of year of loan = 12 x 25 = 300 months

First we need to find the monthly mortgage payment(Principal and Interest)of loan

We can find the monthly mortgage payment of loan by using PMT function in excel

Formula to be used in excel: =PMT(rate,nper,-pv)

Using RATE function in excel, we get monthly mortgage payment = $800.72

Monthly property taxes and hazard insurance = Annual property taxes and hazard insurance / 12 = (3750 + 687) / 12 = 4437/12 = 369.75

Monthly PITI payment = Monthly mortgage payment + Monthly property taxes and hazard insurance = 800.72 + 369.75 = 1170.46

Hence Monthly Payment of Mortgage = $1170.47