# Math Genius

Are You a Math Genius?

With This Little Trick, You’re Going to Sound Like One.

Imagine calculating a principal, interest, tax and insurance payment for that home you’re considering faster than you can find the right app on your phone.

It’s actually pretty simple.

Here’s the formula to use: Sales Price x 1% divided by 2

Example 1: Purchase Price = \$250,000, taxes are \$2,500, loan amount w/ 20% down is \$200,000 at 4.50% on a 30-year fixed rate loan, insurance is \$600 per year.

That’s a lot of math to do, but let’s try our formula:
\$250,000 x 1% = \$2,500, \$2,500/2 = \$1,250.
What’s the actual payment given the real math in this instance? The answer is \$1,272, a mere \$22 a month difference.

Example 2: Purchase Price = \$300,000, taxes are \$3,375, loan amount w/ 20% down is \$240,000 at 4.50% on a 30-year fixed rate loan, insurance is \$720 per year.
\$300,000 x 1% = \$3,000, \$3,000/2 = \$1,500.
What’s the actual payment given the real math in this instance? The answer is \$1,557, just a \$57 per month difference.

Example 3: Purchase Price = \$500,000, taxes are \$5,625, loan amount w/ 20% down is \$400,000 at 4.50% on a 30-year fixed rate loan, insurance is \$1,200 per year.
\$500,000 x 1% = \$5,000, \$5,000/2 = \$2,500.
What’s the actual payment given the real math in this instance? The answer is \$2,595, just \$95 a month difference.

The results will vary a little based on rates, down payment, taxes, mortgage insurance, etc. However, once we’ve shown you the actual math for your situation, you can just add or subtract a little from the formula to compensate for any differences as they apply to you.

Reach out so we can calculate a sample for you. We’re happy to help.

These examples are for educational purposes only, they are not rate quotes or offers to lend. Accordingly, corresponding annual percentage rates are not included.