PITI Mortgage Calculator For Homebuyers

PITI Mortgage Calculator for homebuyers is an invaluable tool that is a must in a homebuyer’s toolkit. It stands for principal, interest, tax (property) & insurance (homeowners). It can be used for calculating payments for both convention and Federal Housing Administration loans.

Homebuyers looking to use this tool will need to know the interest rate, term and loan amount. They will also need to find out the annual or monthly payments for property tax and homeowners insurance. Once these figures are fed in, the tool is able to generate an amortization schedule.

Without this tool, getting the schedule would be a difficult matter where math Factors are involved. These factors are the loan payments required for every $ 1000 of the proposal value. It will depend on the interest rate & the term of the proposal.

As an illustrative example, consider what happens when there isn’t a mortgage calculator with PITI available. Assume that a homebuyer is looking at a $ 250,000 loan with a 5% interest rate for either a 15 or 30 year period. The homebuyer have to consult factor charts to find out that the factor here for 15 and 30 yr loans are 7.91 and 5.37 respectively.

So for the 15 year term, the proposal involves a payment of $ 1977.50 (250 times 7.91) for every $ 1000 in the $ 250k loan amount. For a 30 year term, it would be $ 1342.50 (250 times 5.37). Assuming that no body really wants to go around doing these calculations, it’s a whole lot easier to just use a home loan calculator with taxes and insurance data fed into it along with the proposal’s basic details.

Another notable aspect is that the tool can be used for FHA loans as well, so a homebuyer would be well advised to consider doing an FHA vs conventional loan comparison before making a decision. An FHA loan is insured by the Federal Housing Administration which means a lender doesn’t have to carry a risk and is able to offer a sweeter deal. Homebuyers whose credit isn’t good enough for lenders can get their proposal approved by going through the FHA.