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Step 1
Obtain the principal and interest portion of the monthly payment. This can be done using online mortgage calculators and spreadsheet functions, or by simply asking your Realtor or lending institution. You will need to know the expected term of the loan, the estimated annual percentage rate (APR) and the payment frequency.
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Step 2
Look up the estimated annual taxes for the specific property you are interested in. This number will vary widely even within the same city, so make sure you look up the numbers for each property you want to perform the calculation for. Many times this value is available from your Realtor through the multiple listing service (MLS). Searching the tax records at your local courthouse is another option and will provide the most accurate information.
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Step 3
Get a quote for homeowners' insurance, which will most likely be required by any lending institution. You can call a variety of insurance agencies to obtain quotes, but you will need specific information about the home first, such as the square footage, number of fire alarms, distance from the nearest hydrant, and other items related to safety and security. Your real estate agency will give you exact requirements.
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Step 4
Determine whether additional insurance will be required, and obtain quotes for those as well. Flood insurance is required if your home is located on a predefined flood plain. Sometimes, mortgage insurance will be required, depending on the type of mortgage and the rules of the lending institution. Talk to your lending institution and your Realtor to determine if these apply to your situation, and to obtain more information on how to get valid quotes.
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Step 5
Divide the taxes and the annual insurance premiums by 12 to determine the monthly values, then add them to the principal and interest payment. This will give you an estimate for a complete PITI home payment. PITI includes principal, interest, taxes and insurance.
