by Phil Hoover, Real Estate Broker

Handy Shortcut: Factors

One of the first questions buyers ask me is “how much is the payment?”

Without a financial calculator, that can be difficult to answer.

But, over the years, I have learned a simple shortcut called a “factor”.

What is a factor, anyway?

A factor is the monthly payment amount for each $1,000 borrowed, including principle and interest.

For example, the factor for each $1,000 borrowed on a 30-year fixed-rate loan at 3.50% is $4.49/month.

And, the factor for each $1,000 borrowed on a 15-year fixed-rate loan at 3.25% is $7.03/month.

Simply multiply the factor by the number of thousands of dollars borrowed to calculate your monthly principle and interest payment amount.

You must also add the estimated monthly property taxes and homeowners’ insurance to arrive at your total estimated payment.

Having these factors in mind is just one way I look smarter than I am when buyers ask me how much their monthly payment will be! :)

Need to know the factor for a specific property?

Give me a call at 938-5533 Direct, or e-mail me and I will help you figure it out.

Note: Rates can change as frequently as several times a day; the above rates are only examples.

 

March 12th, 2013 Posted in Inside Real Estate Print This Post Print This Post

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