Saving Money: What One Extra Yearly Payment Can Do to Your Mortgage

Posted by Laine Smith on 11/8/15 10:58 AM

When you receive your monthly mortgage statement, you may have noticed the option of paying more than your required monthly payment. While paying extra principal on your mortgage won't decrease your required monthly payment like a credit card payment, there are several perks of making an extra annual mortgage payment.

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Mortgage 101: Can I Afford a Mortgage?

Posted by Laine Smith on 7/24/15 1:30 PM

With rent prices skyrocketing, one of the most common questions any potential homebuyer has is if they can afford a mortgage (and how much). Here's what you need to know about mortgage affordability.

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Answers to 6 Common First-Time Homebuyer Questions

Posted by Laine Smith on 7/21/15 1:49 PM

Buying a home is a huge, yet beneficial, financial decision. We want our homebuyers to understand the benefits of homeownership, the mortgage process, the costs of their mortgage, and their overall homeownership affordability, so we've compiled a list of common first-time homebuyer questions and answers.

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Mortgage 101: What Is Amortization & How Does It Affect Your Loan?

Posted by Laine Smith on 3/3/15 10:51 AM

One of the biggest perks of a fixed-rate mortgage is the consistent monthly payment. While a borrower’s fixed-rate monthly mortgage payment remains the same for the life of the loan, the amount of payment going toward the loan’s principal and interest varies monthly as it is paid down. This is known as amortization.

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Mortgage Goals: What Goes Into a Mortgage Payment?

Posted by Laine Smith on 11/20/14 10:00 AM

Understanding your mortgage payment is as easy as remembering four letters – P, I, T & I. The mortgage industry uses the acronym PITI, which stands for principal, interest, taxes and insurance, to break down the components of homeowners’ mortgage payments.

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What Goes Into a Mortgage Payment?

Posted by Laine Smith on 8/16/13 9:41 AM

Understanding what goes into a mortgage payment is very simple. A monthly mortgage payment includes at least two parts: principal and interest. Principal is the amount of money you have borrowed and interest is the cost of borrowing that money.

For most homeowners, there is also a third part that is paid into an escrow account. Escrow is a financial instrument created in order to store money collected by a lender. The escrow account allows you to pay for things like homeowners insurance, property taxes, condominium and association feeds and mortgage insurance, if applicable. When your taxes and insurance are due, the lender pays them for you from the escrow account. This amount of your mortgage can increase or decrease, even with a fixed-rate mortgage. Therefore, your mortgage will include principal, interest, taxes and insurance, also known as the acronym PITI.

For example, you find a home that costs $170,000. You are able to make a down payment of 5 percent, or $8,500. The annual property taxes are $1,200 and the annual homeowners insurance is $720. Because your down payment is less than 20 percent, you will pay private mortgage insurance (PMI), as well.

With a 30-year fixed mortgage and an interest rate of 4.5 percent, your PITI with PMI is as follows:

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