Breaking Down Your Monthly Mortgage Payment

How would you like to be served with a month’s worth of avocado toast for free when you buy a home? SoFi, a student loan lender who now dabbles into mortgages, is offering such for those taking out mortgages this July. When the avocado toast is gone, you’ll be left with the monthly mortgage payment. What goes into that monthly payment, you’d like to know. Let’s find out below. Understanding the Monthly Mortgage Payment The continuing cost of homeownership boils down to this acronym, PITI (read as pity). P is for principal. This is the amount you borrowed for your home. I is for interest rate. This is the amount charged on the amount you borrowed. T is for taxes. This refers to the real estate taxes related to your home. I is for insurance. This mainly refers to homeowners’ insurance and if applicable, private mortgage insurance. Mortgage’s Principal and Interest Payment Crunching the numbers for a mortgage can be confusing if you have to do everything from scratch. Nowadays, there are online mortgage calculators for this purpose. Supposing this July you take out a $300,000 home loan with a fixed interest rate of 3.88% to be repaid in 30 years. Your monthly mortgage payment is $1,412. This amount is...

Today’s Rates and Your Choice of a Mortgage Rate

Anyone would all want to be in the loop for the latest in mortgage rates. When rates go down as they have done the past few weeks, expect homeowners’ or homebuyers’ hopes to go up for a purchase or a refinance. Relatedly, it’s a common dilemma to choose between fixed and variable types for a mortgage rate. Which type is right for you? Mortgage Rates Are Going Down Markets that react to geopolitical and economic conditions in and outside of the U.S. carry mortgage rates wherever they need to be. As of late, mortgage rates have descended closer to pre-election results levels. Freddie Mac, which has tracked prevailing rates on conventional conforming mortgages, reported that as of the week ended June 29, 30-year fixed-rate mortgages (FRM) averaged 3.88%. Based on the historical weekly data released by Freddie Mac, 30-year FRM rates stood at 3.57% on November 10. A week after that, they climbed to 3.94% and thus began their ascent to 4.32% by the time 2016 ended. The 30-year FRM fell a few notches at the start of 2017 with 4.20%, reached a new peak in March at 4.30%, and fell to 3.88% in late June. Freddie Mac’s current weekly survey also covered average rates on...

A Fixer-Upper for Your First Home? Here Are Your Mortgage Options.

With the supply of new homes tighter and home prices higher as a result, it’s not surprising why some turn to fixer-uppers. These homes can be less expensive to acquire and fetch a good resale value. There are mortgage products to pay for the purchase of a fixer-upper and its renovation/improvement costs at the same time. What’s a Fixer-Upper, By the Way? In real estate, a fixer-upper is a house in need of repairs to make the home liveable and comfortable. The buyer usually hires an expert, usually a contractor, to tag along and examine the condition of the home and list what needs to be done. While it all takes some minor repairs to restore a property, others would require far extensive work in thousands of dollars. Because these repairs are part and parcel of the house to be purchased, some programs such as the FHA’s 203k loans and Fannie Mae’s HomeStyle® Renovation mortgage roll these two capabilities – purchase and renovation – into a single, dual-purpose mortgage. Get to Know the Mortgage for Your Fixer-Upper First, we have the 203k loan. There are two kinds that match the extent of the rehabilitation needed in the home. Standard. This covers all eligible activities to rehabilitate the...


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