How to Figure Out Your Mortgage Payments

Having own home is the desire of every human being. Country or area is no bound to it. The important question here is: How to have a home of our own. Real Estate owners offer a complete package in which the buyer has to pay an amount on monthly basis and time duration of monthly installments get mutually fixed. A percentage of the total amount needs to be paid by the buyer upfront which can be variable depending upon the nature of their relationship. Normally, the upfront percentage is 5% or 20%. The minimum the down payment is the higher will be the monthly installment. Higher the down payment, lower will be the monthly installment.

The entire process is based on:

• %age down payment
• No. of monthly installments
• Total monthly installment

This is all what is known as Mortgage.

Taxes in Mortgage

There are a number of factors that is involved in the mortgage amount.

• Property Tax
• Fire Insurance
• Maintenance

Property Tax

This property tax is also variable depending on the cost of the house and the amount that is being offered by the bank for the loan purpose. You have to abide by the rules and regulations implemented by the government of your country.

Fire Assurance

In case of fire, agents or companies have to pay the cost of the house that is being insured. For this purpose the person who is getting assurance needs to pay a monthly amount to that agent which incurs it as a tax in its account. If the house gets fire then that agent has to pay the amount to the owner of the house. Fire insurance also has the advantage for the owners or the person who get injured needs to be cured. Fire insurance also gives the life insurance of those people who get hurt during the fire. It is very necessary to get the fire insurance of your house so you can avoid any damage and life risks.

Maintenance

Every owner wants to keep his/her home neat and clean. For this purpose, they spend some amount to keep their home updated so that they don’t have to pay much extra or don’t have to pay several thousand at the end of the year. Like after every 3-4 years the wooden rooftops needs to be replaced which may cost several thousands to the owner of the house. Similarly, the cooling and heating system doesn’t remain working throughout life and require some maintenance at every 5 years.

Formula for Calculating Monthly Installment

In a spreadsheet’s column right the below mentioned formula

= -PMT(X/12,Y,Z)

• X is the interest rate
• Y is the no. of months
• Z is the loan amount

This formula will help you in calculating the monthly installment against the loan but property tax and insurance amount needs to be added in it. Hence it is very necessary to know the amount of mortgage that you need to pay so that you should be able manage the funds accordingly.