What's In Your Mortgage Payment?

A lot of people are unsure about what a mortgage payment actually entails. This article posted by Zillow will give you a better understanding and help with calculating a home loan amount that is affordable for your budget. If you have any other questions, please contact our office via phone or email.

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If you have never owned a home and had a mortgage, it can be a little confusing to see what makes up your monthly mortgage payment. Every lender has their own methods when it comes to collecting your monthly mortgage payment, but generally speaking the breakdown of a mortgage payment is pretty standard.
The first component of your mortgage payment is often referred to as P/I or Principal and Interest. The principal and interest component is simple to calculate and even the simplest of mortgage calculators will let you input the loan amount, term of the loan and interest rate and calculate the P/I payment over the term of the loan.
Generally speaking with most mortgage loans, the first payments you make will be mostly interest and the last few payments you make will be mostly principal.
The second component of your mortgage payment is often referred to as T or Taxes. Your property taxes are assessed by the county you live in and are typically collected as part of your mortgage payment by your lender who then pays your taxes on your behalf when they are due (typically twice each year). In some areas of the country, property taxes are high and in some they are low — but generally speaking your property taxes are paid into an escrow account at your lender and held there until paid.
The third component of your mortgage payment is I or Insurance. Insurance refers to your homeowners insurance. Like your taxes, it is common for your lender to have an escrow account set up for you for your insurance premiums. You pay 1/12th of the annual premium each month as part of your mortgage payment and your lender then pays your insurance company once each year.
Depending on how much money you put down as a down payment and what type of loan program you have, you may or may not have M/I or Mortgage Insurance. Mortgage insurance is different than Insurance. Mortgage insurance is paid by the borrower to the lender and the lender pays that to private MI companies who agree to pay the lender in the event the borrower defaults.

Here is a simple example of a mortgage payment breakdown:

For a $200,000 conventional loan at 5% fixed rate/APR: 5.19%, 30-yr term with a $1,200 annual property tax bill and a $1,200 annual insurance policy premium to insure the home with no mortgage insurance, it would look like this:
Principal / Interest = $1,074
Taxes = $100
Insurance = $100
Total PITI Payment = $1,274

NAHB Reports That a Record High of 291 Housing Markets were Listed as Improving in September

Check out this link to the article...http://www.nahb.org/news_details.aspx?sectionID=148&newsID=16447

Among the 291 referenced in the article, 6 of the cities were within Oregon. Salem, OR, Portland, OR, Medford, OR, Eugene, OR, Corvallis, OR, and Bend, OR were all mentioned as improving in the housing market.

The good news of increasing home values and higher employment rates can make a difference in your home buying power. As the economy continues to improve, rising home loan interest rates are more of a possibility than before.

Is this the best time for you to purchase or refinance? We do home loans throughout the state of Oregon. Please visit our website or give our friendly office a call to find out more about our loan programs.

Do You Know What Your Credit Report Says?

A 2013 Federal Trade Commission study on credit report accuracy found that 1 in 5 consumers had an error on at least one of their 3 credit reports. A smaller portion of the total were serious errors that could have resulted in higher costs for loans and insurance.

http://ftc.gov/opa/2013/02/creditreport.shtm