What is a Mortgage?

Mortgage Payments You’re probably curious why we’ve created an entire section about mortgage payments. However, since a mortgage payment is one of the major side affects of purchasing real estate with a home loan financing program, we thought it would be important to highlight a couple topics and related articles about mortgage payments that may impact your monthly budget. Mortgage Payment Basics: Just in case your first mortgage payment comes due before you get your first payment coupon in the mail, there should actually be a temporary payment coupon included with your closing documents. Your mortgage payment is generally due at the beginning of the month, and most lenders start assessing late fees on the 15th. It is extremely important to remain under 30 days late on a mortgage payment, especially within the first 8-12 months of closing on a new loan. When you receive your first mortgage bill, there will be a few numbers that add up to your total payment: Principal – This is the portion that goes towards paying down your balance. An Amortization Schedule will break down the exact amount of each payment that is being applied to the principal and interest. Interest – The interest payment is essentially the amount you’re paying the bank over time to borrow the principal balance. Depending on which loan program, interest rate and closing cost scenario you chose, the amount of interest due every month may vary. Taxes - Real Estate Taxes can either be included (Impounded) in your monthly payment (PITI), or paid by the homeowner separately. Certain government loan programs or high Loan-to-Value (LTV) mortgages require that taxes and insurance be included with the total mortgage payment. Either way, it’s important to make sure you ask your loan officer and/or closing agent during the final loan docs signing to clearly explain what’s included in your monthly mortgage payment. Insurance – This is your hazard insurance (Fire), which protects your home and belongings. While there are many ways to save money on your property insurance, it’s important to know and trust your insurance agent so that you can be fully aware of what’s covered in your policy. Some homeowners shopping strictly on price may unknowingly leave valuable personal items without protection just to save an extra $15-$19 a month. Mortgage Insurance – This can come in a few different forms, depending on whether you have an FHA loan, VA, Conventional, Jumbo… Mortgage insurance is in addition to hazard insurance, and completely unrelated. A lender will require a borrower to pay mortgage insurance on a property with a Loan-to-Value greater than 80%. The main purpose of mortgage insurance is to protect from foreclosure losses if the borrower fails to meet the monthly payment obligations. FHA has mandatory Mortgage Insurance, but in a different form. VA loans have a separate Funding Fee to help protect their interests.

What is my Home Worth??

What Do Appraisers Look For When Determining A Property’s Value? Most people are surprised to learn what appraisers actually look at when determining the value of a real estate property. A common misconception homeowners generally have is that the value of their home is determined after the appraiser has completed their physical property inspection. However, the appraiser actually already has a good idea of the property’s value by the time they have scheduled an appointment to stop by the property. The good news is that you don’t have to worry so much about pushing back an appointment a few days just to “clean things up” in order to help influence the value of your property. While a clean house will certainly make it easier for the appraiser to notice improvements, the only time you should be concerned about “clutter” is if it is damaging to the dwelling. The Key Components Addressed In An Appraisal The Site: Location, view, topography, lot size, utilities, zoning, external factors, highest and best use, landscaping features… Design: Quality of construction, finish work, fixed appliances and any defining features Condition: Age, deterioration, renovations, upgrades, added features Health & Safety: Structural integrity, code compliance Size: Above grade and below grade improvements Neighborhood: Is the property conforming to the neighborhood? Functional Utility: Is the property functional as built – style and use? Parking: Garages, Carports, Shops, etc.. Other: Curb appeal, lot size, & conforming to the neighborhood are obvious to the appraiser when they drive down into the neighborhood pull up in front of your home. When entering your home, they are going to look at the overall design, condition, finish work, upgrades, any defining features, functional utility, square footage, number of rooms and health and safety items. Be sure to have all carbon monoxide and smoke detectors in working condition. Since the appraisal provides half the weight in any credit decision involving the security of real estate, the appraisal should be done by a qualified, licensed appraiser whom is familiar with your neighborhood, and the type of home you are buying, selling or refinancing. We hope you found this information helpful. For more information about our company please visit www.txpremiermortgage.com, or give us a call at 281-907-6401 and we would be happy to assist you!