Understanding Mortgage Costs

I "PITI" the fool!

PITI is an acronym that stands for Principal, Interest, Taxes, and Insurance.

In todays mortgage market interest rates can be as low as 3% but that quoted interest rate and mortgage rate does not necessarily include Property Taxes and Home Insurance. To get a ballpark figure of the taxes in Cook County Illinois simply multiply the Appraised value (purchase price may be different) by 1.5%-2%. For example, our typical 2 flat homes taxes are about $2900 per year. In this scenario, $180,000 is the typical appraised value for our 2 flat homes and 1.6% of the appraised value represents an annual property tax of $2,898.

That is calculated as:
$180,000 x .01611= $2,898.

By taking the $2,898 and dividing it by 12 months you will arrive at your per month obligation, which is $241.5. Furthermore, quality home insurance will be around $150 per month. Of course your insurance person will provide you with more competitive rates if you have alarm systems, new mechanicals (which you do), automobiles on the policy, and more.

In conclusion, by following these simple calculations you can arrive at an approximate mortgage payment including taxes and insurance. Next article we will learn how to arrive at an estimated cost for energy and how Miro Development, LLC helps you save on energy by using energy efficient building methods, materials, and appliances.

michael@mirodevelopment.com