How much will my mortgage payment be?
The majority of buyers want to know how much their monthly mortgage payment will be even before they put in an offer to buy a home. This is understandable, because most people don’t want a home to be a burden on their budget. Your
mortgage payment will likely include several different charges. Here are the most common.
Principal - The principal is the amount you borrowed and have to pay back to the lender.
Interest - the amount the lender charges for lending you the money.
It may be good ideas to shop a couple of different lenders. The interest rate and loans fees you will be charged may vary from lender to lender.
Real Property taxes – tax placed on property according to the property value as determined by its municipality.
Special Assessments tax – an individual tax charge against real property in a certain area that received a benefit such as a new sidewalk, street lights, etc. Check with your agent to see if there are any current or pending special assessments.
Mortgage Insurance - an insurance policy which protects the lender in case you fall behind or default on your mortgage. It also helps people get a loan who would not otherwise qualify.
Additional Payments
Additional Payments
In addition to principal, interest, taxes and insurance you can usually expect to pay property insurance and may have to pay HOA fees. These are typically paid separately from the mortgage, but its a good idea to know what to expect.
Homeowners Association dues – If applicable, some neighborhoods or areas require monthly or annual fees for the upkeep of common areas.
Property Insurance – lenders will require a buyer to get a property insurance policy with adequate coverage. On occasion, the property insurance may be included in the mortgage payment, but it is usually paid separately by the buyer. However, the buyer will have to show proof of coverage.
Reviewing your Loan Estimate
Anytime you formally apply for a loan, the lender is required to give you a Loan Estimate. The loan estimate will reveal many things about your loan including your monthly principal and interest payment as well as projected taxes and insurance. Reviewing this statement is the best way to estimate your monthly mortgage payment.
If you need to buy or sell a home, I’ll help you Move On!
JJ Brannon - Realtor at Weichert Realtors Triad Associates
Sources
North Carolina Real Estate Manual, 2017
https://www.consumerfinance.gov/ask-cfpb/on-a-mortgage-whats-the-difference-between-my-principal-and-interest-payment-and-my-total-monthly-payment-en-1941/
https://www.consumerfinance.gov/ask-cfpb/what-is-mortgage-insurance-and-how-does-it-work-en-1953/
https://www.investopedia.com/articles/mortgages-real-estate/08/homeowners-associations-tips.asp#ixzz5Bn4wC4dY