How Much will my Mortgage Payment be?
I get this question a lot, mainly from first-time buyers of course.
You don't have to Google too long before finding a plethera of online mortgage calculators. For someone who has never had a mortgage payment before, I think it's important to mention that all of these calculators only show part of the picture (most of it but not all of it). Your entire monthly payment is comprised of principal, interest, taxes, and insurance or PITI for short. Online mortgage calculators will only give you the principal and interest payment which is the bulk of the payment.
Taxes can be figured out with a little research. If you know the exact address of the property you want to buy, just go to the city's government website for that home. Here you will look for the real estate assessment section, plug in the address, and you'll be able to find out the yearly taxes for that particular property. Simply divide that figure by 12. In Hampton Roads, real estate taxes range from the lowest, .785 per hundred in Williamsburg to the highest, $1.21 per hundred in Portsmouth. Okay, "per hundred" of what? The tax rate is based on what the city has assessed the home at not the appraised value. Most people do not realize this! Appraised value has nothing to do with how much you pay in taxes and because of that, you always want the assessed value of your home to be low.
Insurance is a different animal all together. Every home is different and there are other factors that come into play, such as flood zones. I'm sure that a professional insurance agent would be able to plug in an address and pop out a figure for you in seconds but a good "rule of thumb" to use is 1/2 of 1% of the sales price. So, for example, if you buying a $200,000 home, your insurance cost are roughly $1,000 for the year.
Hope this helps and doesn't totally confuse you. Over the years, after many closings and talking with lots of other professionals in our industry, I've come up with a real easy formula to determine what your total payment would be on a particular home. You should expect to pay somewhere around $700-$750 a month per $100,000 of loan amount. So, with a loan amount of $200,000, your monthly mortgage payment including PITI would be in the neighborhood of $1500. Obviously, there are many factors that could affect this formula, like flood zones and your interest rate, but it's definitely a good gauge for an "off the cuff" evaluation when shopping.
Please let me know if you have any other questions or if you would like to get started searching for your new home.
Jeff Nelson
757-749-1616
www.homesandfood.com
You don't have to Google too long before finding a plethera of online mortgage calculators. For someone who has never had a mortgage payment before, I think it's important to mention that all of these calculators only show part of the picture (most of it but not all of it). Your entire monthly payment is comprised of principal, interest, taxes, and insurance or PITI for short. Online mortgage calculators will only give you the principal and interest payment which is the bulk of the payment.
Taxes can be figured out with a little research. If you know the exact address of the property you want to buy, just go to the city's government website for that home. Here you will look for the real estate assessment section, plug in the address, and you'll be able to find out the yearly taxes for that particular property. Simply divide that figure by 12. In Hampton Roads, real estate taxes range from the lowest, .785 per hundred in Williamsburg to the highest, $1.21 per hundred in Portsmouth. Okay, "per hundred" of what? The tax rate is based on what the city has assessed the home at not the appraised value. Most people do not realize this! Appraised value has nothing to do with how much you pay in taxes and because of that, you always want the assessed value of your home to be low.
Insurance is a different animal all together. Every home is different and there are other factors that come into play, such as flood zones. I'm sure that a professional insurance agent would be able to plug in an address and pop out a figure for you in seconds but a good "rule of thumb" to use is 1/2 of 1% of the sales price. So, for example, if you buying a $200,000 home, your insurance cost are roughly $1,000 for the year.
Hope this helps and doesn't totally confuse you. Over the years, after many closings and talking with lots of other professionals in our industry, I've come up with a real easy formula to determine what your total payment would be on a particular home. You should expect to pay somewhere around $700-$750 a month per $100,000 of loan amount. So, with a loan amount of $200,000, your monthly mortgage payment including PITI would be in the neighborhood of $1500. Obviously, there are many factors that could affect this formula, like flood zones and your interest rate, but it's definitely a good gauge for an "off the cuff" evaluation when shopping.
Please let me know if you have any other questions or if you would like to get started searching for your new home.
Jeff Nelson
757-749-1616
www.homesandfood.com
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