Calculating your mortgage payment in Oklahoma can seem daunting, but with the right tools and understanding, you can easily determine what your monthly expenses will be. Here’s a step-by-step guide to help you navigate this process.

Understanding Mortgage Components

Your mortgage payment typically includes four key components, often referred to as PITI: Principal, Interest, Taxes, and Insurance.

• Principal: This is the amount of money you borrow.
• Interest: The cost of borrowing the principal, expressed as a percentage.
• Taxes: Property taxes that are imposed by local governments.
• Insurance: Homeowners insurance to protect your property, and possibly mortgage insurance if your down payment is less than 20%.

Gather Your Information

Before you start the calculation, gather the following information:

• Loan Amount (Principal)
• Annual Interest Rate (as a decimal)
• Loan Term (in years)
• Annual Property Tax (if applicable)
• Homeowners Insurance Costs (if applicable)

Formula for Monthly Mortgage Payment

The formula for calculating your principal and interest payment is:

M = P [ r(1 + r)n ] / [ (1 + r)n – 1 ]

Where:

• M: Monthly payment
• P: Loan amount (principal)
• r: Monthly interest rate (annual interest rate divided by 12)
• n: Number of payments (loan term in years multiplied by 12)

Steps to Calculate Your Payment

Follow these steps to find your monthly mortgage payment:

1. Convert your annual interest rate to a monthly rate. For example, if the annual rate is 4%, the monthly rate would be 0.04 / 12 = 0.00333.
2. Determine the total number of payments. For a 30-year mortgage, it would be 30 * 12 = 360 payments.
3. Plug these values into the formula to calculate M (Principal and Interest payment).

Adding Taxes and Insurance

After calculating your principal and interest payment, you need to add your property taxes and homeowners insurance:

• Divide your annual property taxes by 12 to get the monthly tax amount.
• Do the same for homeowners insurance.

Your total monthly mortgage payment will be:

Total Payment = M (Principal and Interest) + Monthly Property Tax + Monthly Homeowners Insurance

Example Calculation

Suppose you’re buying a home in Oklahoma with the following details:

• Loan Amount: $200,000
• Annual Interest Rate: 4%
• Loan Term: 30 years
• Annual Property Taxes: $2,400
• Annual Homeowners Insurance: $1,200

Using the formula:

• Monthly Interest Rate = 0.04 / 12 = 0.00333
• Number of Payments = 30 * 12 = 360
• M = 200,000 [ 0.00333(1 + 0.00333)³⁶⁰ ] / [ (1 + 0.00333)³⁶⁰ – 1 ]

This calculates to approximately $954.83 for principal and interest.

Next, add your monthly property tax and insurance:

• Monthly Property Tax = $2,400 / 12 = $200
• Monthly Homeowners Insurance = $1,200 / 12 = $100

Total Monthly Mortgage Payment = $954.83 + $200 + $100 = $1,254.83.

Using Online Calculators