how do you calculate a mortgage?

Question

I am looking to purchase a property for $190k w/ 5% down fixed rate.  Taxes are $6,800 per yer.  It comes out to be about 1700 per month = $20400 per year.  Take the taxes out it comes out to be $13,600 per yr. The mortgage is 30yrs but when i do the math it comes out to be $408K im paying over 30 years.  Is this correct?  Should a mortgage really be more than double the cost of the home over 30years?

Prashant P. · Answer

If you have Excel, there is a template for loan ammortization.  You can use this sheet to get payments for different loan scenarios.  Then you can see which terms are better for you.

William Bannister · Answer

And they wonder why banks do so well .We wont even talk about the whole bails out or any of that cheap money they get.
  I paid 9% on my first loan and I thought I was lucky. It was of course over 20 years ago.
  3 years later I was able to refinance it into 6%. 
  The financing is part of the game  but your purchase price is really the key in making money or getting spread,equity. 
    Everyone above is correct your owner occupied house its not even an asset to you if you live there its a liability. 
   Although I will argue with  Robert Kiyosaki on this point about asset/liability.. It would be hard for me to produce the way I do if I didnt have a roof over my head and electricity to make sure I was able to get a hot shower in the morning so I could actually be a productive person.
  Yes it can be surprising to find out your paying 2.5 times what your purchase price. It then comes down to it, will the home create any problems in the future for your career advancement and or ability to get more assets or greater net worth. Some people once they buy its a ball and chain. For other people if they got a great deal that means they can make money if they sell. 
   The bible say borrower is servant to the lender..Thats a powerful statement.

Cody C. · Answer

It's crazy to sit down at the closing table with clients who are first time home buyers, and when they see the paper that says how much interest they are going to be paying over the 30 years, and what their total cost will be, their eyes practically bug out of their heads =P

I suppose you could use an amortization table /breakdown to help sell seller financing too for that same reason.

Jon Holdman · Answer

I get a payment of $861.73 for principal and interest on a &180,500 30 year, 4% loan. Taxes, insurance, maintenance etc have to be paid with or without a mortgage. The total is $310,223 for total interest of about &130,000.  Yeah, that's how it works.  Be grateful you're not dealing with 15% owner occupied interest rates like when I first started looking at houses. I was grateful to get a 9%, 15 year loan to buy my first house in 1987.

I've written many times a house you live in is not an investment. It's just a really expensive doo-dad. Now you're seeing why I say that.

Mark Reynolds · Answer

Now you know why people finance on 15 year terms.

Dawn Anastasi · Answer

I think the average is about 2.5x the purchase price is what you pay over a 30 year loan.

Wayne Brooks · Answer

That sounds about right.  Rember, you're paying about 4% Per Year, interest on the unpaid alliance.  As for the exact break down, month by month........Google, mortgage calculator......lots of them on line.