10 terms

Real Estate Math Equations

Qualifying Buyers
PITI = Qualifying Ratio X Gross MONTHLY income
Discount Points
Dollar amount of points = Points % X Loan Amount
Prorating rent
monthly rent / # days in month = daily rent
Prorating Interest
Loan Amount X Interest Rate % = Annual Interest
365 or 360
Amount per day
Prorating Taxes
Appraised Value X Tax Rate % = Annual Tax
365 or 360
Amount per day
Income Properties
Net income (Gross - expenses) = CAP rate X Market Value
Gross Rent Multiplier (GRM)
Value of property = GRM# X Monthly Rent
Annual Tax
Annual Tax = (tax rate/$100) X Appraised Value
Annual Interest
Annual Interest = APR X Loan Amount Principal
Monthly Payments
Monthly payments = (Interest rate factor/1000) X Loan Amount