Real Estate Math

A 30-year fixed-rate mortgage in New York has a principal of $500,000 at 7% annual interest. Using a factor of $6.65 per $1,000 borrowed (approximate monthly payment factor for 7%, 30-year loan), what is the approximate monthly PITI before taxes and insurance?

A$2,650
B$3,325✓ Correct
C$3,880
D$4,000

Explanation

Monthly principal and interest = ($500,000 / $1,000) x $6.65 = 500 x $6.

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