What Is Included In A Monthly Mortgage Payment?

 

The monthly mortgage payment mainly pays off principal and interest. But most lenders also include local real estate taxes homeowner’s insurance, and mortgage insurance, if applicable.
If you are refinancing compare what is and isn’t included in your financing options. Watch this video and it’ll make sense.

What Are The Advantages Of 15- And 30-Year Fixed-Rate Mortgages?

 

For both, as we show you in this video, compared with other options,  with fixed rates, housing costs won’t be affected by interest rate changes and inflation.

With A 30-Year Term: In the first 23 years of the loan more interest is paid off than principal meaning larger tax deductions. As inflation and costs of living increase mortgage payments become a smaller part of overall expenses.

With A 15-year Term: Loan is usually made at a lower interest rate. Equity is built faster because early payments pay more principal. And the loan is paid off earlier.

Compare payments, principal and interest totals to make a decision.

What Is A Mortgage?

 

The original phrase “mort gage” translates as “death pledge”! But as this video explains, a mortgage is a loan obtained to purchase real estate.
The “mortgage” itself is a lien – a legal claim on the home or property that secures the promise to pay the debt.

All mortgages have two features in common: principal and interest.

The principal is the amount you are borrowing which is “secured” by the lender’s claim on the property.

The interest, usually stated as the percentage rate is the additional amount paid for borrowing. Mortgage interest is ‘compounded’ – interest on interest, over time.

Are There Special Mortgages For First-Time Homebuyers?

 

Yes. Like the video shows, lenders now offer several affordable mortgage options which can help first-time homebuyers overcome obstacles that made purchasing a home difficult in the past.

Lenders may now be able to help borrowers who don’t have a lot of money saved for the down payment and closing costs, have no or a poor credit history, have quite a bit of long-term debt, or who have experienced income irregularities.

What Are “Home Warranties”, And Should I Consider Them?

 

You’ll see some pictures in this video to help you remember later, but essentially, home warranties offer you protection for a specific period of time, such as one year, against potentially costly problems like unexpected repairs on appliances or home systems which are not covered by homeowner’s insurance.

Warranties are becoming more popular because they offer protection during the time immediately following the purchase of a home a time when many people find themselves cash-strapped.

What Is Earnest Money, And How Much Should I Set Aside?

 

Like the video shows, “earnest money” is money you put down to demonstrate your seriousness about buying a home. It must be substantial enough to demonstrate good faith and is usually between 1-5% of the purchase price though the amount can vary with local customs and conditions.
If your offer is accepted the earnest money becomes part of your down payment or closing costs. If the offer is rejected, your earnest money is returned to you. If you back out of a deal, you may forfeit the entire amount.

What About A Home Located In A Flood Plain?

 

A flood plain is an area of land adjacent to a stream or river that experiences flooding during periods of high discharge. Watch this video and it’ll make sense.

If you live in a flood plain lenders will require that you have flood insurance before lending any money to you. But if you live near a flood plain, you may choose whether or not to get flood insurance coverage for your home.

Check the National Flood Insurance Program site  at FloodSmart.gov  for more information. And work with an insurance agent to construct a policy that fits your needs.

Is An Older Home A Better Value Than A New One?

 

Well, as this story shows, there isn’t a definitive answer to this question. You should look at each home for its individual characteristics.

Generally, older homes may be in more established neighborhoods offer more ambiance and have lower property tax rates. People who buy older homes, however shouldn’t mind maintaining their home and making some repairs.

Newer homes tend to use more modern architecture and systems are usually easier to maintain and may be more energy-efficient. People who buy new homes often don’t want to worry initially about upkeep and repairs.

How Can I Keep Track Of All The Homes I See?

 

There are some great tips in this video, like:

if possible, take photographs of each house: the outside, the major rooms, the yard and extra features that you like or ones you see as potential problems.

Write things down as you go. And don’t hesitate to return for a second look.

Use the HUD Home Scorecard (www.hud.gov/buying/checklist.pdf) to organize your photos and notes for each house.

What Should I Look For When Walking Through A Home?

 

As we show you in this video, in addition to comparing the home to your minimum requirement and wish lists use the HUD Home Scorecard and consider the following:

  • Is there enough room for both the present and the future?
  • Are there enough bedrooms and bathrooms?
  • Is the house structurally sound?
  • Do the mechanical systems and appliances work?
  • Is the yard big enough?
  • Do you like the floor plan?
  • Will your furniture fit in the space?
  • Is there enough storage space?

Bring a tape measure to better answer these questions and write down your measurements.

  • Does anything need to repaired or replaced?
  • Will the seller repair or replace the items?

Imagine the house in good weather and bad and in each season. Will you be happy with it year-round? Take your time and think carefully about each house you see. Keep the scorecard and notes for each one.