Home buyers and real
estate investors who want to purchase their property often wonder
how much their Monthly Mortgage Payment would be. Of course, the
best way to find this is to hire a REALTOR®
or a Lender who has the knowledge, expertise, access to the required data
& tools, and necessary
programs to come up with the most accurate number for the specific
property.
Disclaimer:
This article contains “rule of thumb” numbers that show the
relationship between the values of the house vs. the total Mortgage
Monthly Payment. Please note that this is an estimate rule of
thumb, is not an exact value, not to be used as legal advice or in a
contract. This estimate should only be used as a guideline.
The Mortgage
Monthly Payment depends on many factors such as:
Purchase price,
Down payment,
Interest Rate,
Term of the loan (e.g., 30-year fixed, 15-year fixed, ARM, etc.),
Type of the loan (e.g., FHA, VA, Conventional, etc),
Up Front and Mortgage Insurance Premium (e.g., FHA UPMIP and MIP,
Points and PMI in Conventional),
Homeowner Association Fee (HOA),
Property Tax (e.g., City, County, School Taxes),
Hazard Insurance,
Flood Insurance (if any),
etc.
Based
on several sets of assumptions, considering all factors shown above
applicable to the range of prices, I calculated each and every item
shown above as well as the Total Monthly Mortgage Payment. Please
see
Monthly_Payment_vs_Loan.pdf for all detail calculations and all
scenarios.
Please feel free to use
Monthly_Payment.asp to calculate and determine all the above
items and this ratio based on your specific data set.
A summary
of this result, based on the following set of assumptions shown
below shown in Table 1.
:
Assumptions:
Down payment, = 20%
Interest Rate, = 4.5%
Term of the loan = 30-year fixed,
Type of the loan = FHA
FHA UPMIP = 1.75%
FHA MIP,
= 1.20%
HOA Fee (HOA), = Ranges from $0 – to $75 per Month
Property Tax Rate = 2.1883% for every $100
Hazard Insurance, = Ranges from $800 – to $2200 per Year,
Depending on the value of the house
Table
1: 20% Down Payment, FHA 30-year Fixed Rate of 4.5%
|
$ Purchase Price |
$Loan Amount |
Total Monthly Mortgage Payment |
Ratio of the Monthly Payment to Loan |
Ratio of the
Monthly Payment to the value of the House |
|
$120,000 |
$ 96,000 |
$741.51 |
0.9041 % |
0.7233%
à
0.73% |
|
$170,000 |
$136,000 |
$1,235 |
0.9082 % |
0.7265%
à
0.73% |
|
$220,000 |
$176,000 |
$1,652 |
0.9388 % |
0.7415%
à
0.74% |
|
$280,000 |
$224,000 |
$2,086 |
0.9314 % |
0.7451%
à
0.74% |
|
$Purchase Price |
Ratio of the Monthly Payment to the value of the House |
|
$ OR the Value |
100% Down |
25% Down |
20% Down |
10% Down |
5% Down |
3.50% Down |
|
$120,000 |
0.24% |
0.62% |
0.73% |
0.78% |
0.81% |
0.83% |
|
$170,000 |
0.24% |
0.62% |
0.73% |
0.78% |
0.81% |
0.83% |
|
$220,000 |
0.26% |
0.64% |
0.75% |
0.81% |
0.84% |
0.85% |
|
$280,000 |
0.26% |
0.64% |
0.75% |
0.81% |
0.84% |
0.85% |
| |
|
|
|
|
|
|
|
As
you can see in the above Table, I have concluded that the monthly
mortgage amount is directly related to the home’s loan value and
home prices, for a given loan type and loan term.
A
good "rule of thumb" for home buyers and investors to estimate the
total monthly mortgage payment, at least in Collin County, is the
0.75% factor. For example, if
your property is worth between $220,000-$280,000, which is the most
common range of values in Frisco, you could estimate its’ mortgage
payment to be about 0.9% of its loan amount (assuming 20% down) or
to be 0.75 %
of the value of the house.
Another example if the value of a property is $220,000 or less, the
Monthly Mortgage Payment for the property should be about 0.73% of
the market value of the property (assuming 20% down)
Please feel free to use
Monthly_Payment.asp to calculate and determine all the above
items and this ratio based on your specific data set.
|
Contact us about your Financing
Questions |
0.75%?
0.85%? 
