San Diego mortgage brokers report California home sales increasing. Business is picking up in many areas of the country including San Diego California as mortgage brokers report that their work hours are extending into the weekend. Find out more about what the future holds for real estate in California.
I have purchased a total of four new construction homes. I have had good experiences and bad. See how Garman homes sizes up by watching this short video. If you are looking to buy new construction in North Carolina make sure to watch this video to help you narrow down your search on which builders to avoid or consider for your next purchase.
First Priority Financial, a Raleigh mortgage lender is a direct lender for Homepath Loans. Watch this short video explaining the benefits of a Homepath loan such as a small down payment, no mortgage insurance among other benefits. Please forward the link to this video to anyone who could benefit from this info about Homepath loans and mortgages or subscribe to our YouTube Channel. Feel free to contact us with any questions.
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And Yet Another Home Sold by Craig Rutman,
Your Raleigh, Cary, Apex area Real Estate agent!
This beautiful home in Durham, NC is now sold.
But don’t worry folks. I have others.
If you’re looking to buy or sell a Raleigh/ Cary/ Apex area home, you’re just a click or a phone call away.
Prefer to click?
www.justNChomes.com is your one stop resource for all your Real Estate needs in the Triangle area.
If you prefer to call, 919-349-9530 is the number!
I’m here and I’m ready to help you get your home sold,
or to help you begin the search for your new Raleigh/ Cary/ Apex area home.
Current mortgage rate trends remain unchanged. Consensus is that we are finally recovering from the housing meltdown and mortgage rates are likely to begin rising in coming months. If you are looking to buy a home or refinance your home contact us for a free rate quote.
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How to Shop Mortgage Rates
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Mortgage rate shopping can be a stressful experience because you really don’t have the right tools to shop mortgage rates. Watch this short video that explains how to predict when mortgage rates will rise and fall. Because of our licensing we are both a Raleigh direct lender and also a Raleigh mortgage broker. Visit my website Raleigh Home Loans
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How to Shop Mortgage Rates
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Current mortgage rate trends remain volatile as investors aren’t sure which way to save their money. Mortgage rates are still historically low but won’t remain there much longer as FHA is scheduled to raise their mortgage insurance premiums on April 9th. Contact me to get pre approved before the FHA MIP goes up or for more info.
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San Diego Mortgages – San Diego FHA Broker
How to Shop Mortgage Rates
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Mortgage Insurance, sometimes referred to as Private Mortgage Insurance, is required by lenders on conventional home loans if the borrower is financing more than 80% Loan-To-Value.
According to Wikipedia:
Private Mortgage Insurance (PMI) is insurance payable to a lender or trustee for a pool of securities that may be required when taking out a mortgage loan.
It is insurance to offset losses in the case where a mortgagor is not able to repay the loan and the lender is not able to recover its costs after foreclosure & sale of the mortgaged property.
PMI isn’t necessarily a bad thing since it allows borrowers to purchase a property by qualifying for conventional financing with a lower down payment.
Private Mortgage Insurance (PMI) simply protects your lender against non-payment should you default on your loan. It’s important to understand that the primary and only real purpose for mortgage insurance is to protect your lender—not you. As the buyer of this coverage, you’re paying the premiums so that your lender is protected. PMI is often required by lenders due to the higher level of default risk that’s associated with low down payment loans. Consequently, its sole and only benefit to you is a lower down payment mortgage
Private Mortgage Insurance and Mortgage Protection Insurance
Private mortgage insurance and mortgage protection insurance are often confused.
Though they sound similar, they’re two totally different types of insurance products that should never be construed as substitutes for each other.
Automatic Termination
Thanks to The Homeowner’s Protection Act (HPA) of 1998, borrowers have the right to request private mortgage insurance cancellation when they reach a 20 percent equity in their mortgage. What’s more, lenders are required to automatically cancel PMI coverage when a 78 percent Loan-to-Value is reached.
Some exceptions to these provisions, such as liens on property or not keeping up with payments, may require further PMI coverage.
Also, in many instances your PMI premium is often tax deductible in a similar fashion as the interest paid each year on your mortgage is tax deductible. Please, check with a tax expert to learn your tax options.
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By committing to a mortgage loan, the borrower is entering into a financial agreement with a lender to pay back the mortgage money, with interest, over a set period of time.
The borrower’s monthly mortgage payment may change over time depending on the type of loan program, however, we’re going to address the typical 30 year fixed Principal and Interest loan program for the sake of breaking down the individual payment components for this particular article about an amortization schedule.
On each payment that is made, a certain amount of interest is taken out to pay the lender back for the opportunity to borrow the money, & the remaining balance is applied to the principal balance.
It’s common to hear industry professionals and homeowners talk about a mortgage payment being front-loaded with interest, especially if they’re referencing an amortization chart to show the numbers. Since there is more interest being paid at the beginning of a mortgage payment term the amount of money applied to interest decreases over time, while the money applied to the principal increases.
We can better understand mortgage payments by looking at a loan amortization chart, which shows the specific payments associated with a loan.
The details will include the interest and principal component of each periodic payment.
For example, let’s look at a scenario where you borrowed a $100,000 loan at 7.5% interest rate, fixed for 30 year term. To ensure full repayment of principal by the end of the 30 years, your payment would need to be $699.21 per month. In the first month, you owe $100,000, which means the interest would be calculated on the full loan amount. To calculate this, we start with $100,000 and multiply it by 7.5% interest rate. This will give you $7,500 of annual interest. However, we only need a monthly amount. So we divide by 12 months to find that the interest equals $625. Now remember, you are paying $699.21. If you only owe interest of $625, then the remainder of the payment, $74.21, will go towards the principal. Thus, your new outstanding balance is now $99,925.79.
In month #2, you make the same payment of $699.21. However, this time, you now owe $99,925.79. Therefore, you will only pay interest on $99,925.79. When running through the calculator in the same process detailed above, you will find that your interest component is $624.54. (It is decreasing!) The remaining $74.68 will be applied towards principal. (This amount is increasing!)
Each month, the same simple mathematic calculation will be made. Because the payments are remaining the same, each month the interest will continue to be reduced and the remainder going towards principal will continue to increase.
An amortization chart runs chronologically through your series of payments until you get to the final payment. The chart can also be a useful tool to determine interest paid to date, principal paid to date, or remaining principal.
Another frequent use of amortization charts is to determine how extra payments toward principal can affect and accelerate the month of final payment of the loan, as well as reduce your total interest payments.
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Calculating an exact mortgage payment without a calculator on a loan is no small task, but there are some simple rules-of-thumb you can use to get a close estimate.
With the exception of the MIT Blackjack Team, performing this type of complex math in your head often leads to frustrating rants.
When coming up with a rough estimate, it is important to understand the individual components that factor into the overall monthly mortgage payment.
Yes, the thousands of dollars you send to your lender every year may cover more than just the mortgage, but referring to one simple formula will help you gauge what the new payment will be as you’re out looking for new properties that may be in your price range.
A mortgage consists of 4-6 parts:
Most lenders use the acronym (PITI), which includes Principal, Interest, Taxes & Insurance.
And in the case where a separate Mortgage Insurance Premium is required, we add another “I” to the end of that creative series of letters.
Another monthly expense that you have to consider is the monthly dues that come with properties that have a homeowner’s association (common in condominiums and other developments). This isn’t a payment made to your lender, but you will have to qualify with that payment and it is also best practice for you to factor that in the monthly cost of your new home.
Confused yet? Don’t worry, this is slightly easier than most state bar exams.
Ok, you’ve made it this far and haven’t closed your browser, so that is a good thing.
Please keep in mind, this top secret formula will by no means be exact.
Mortgage Payment Formula:
For every $1000 you borrower, your TOTAL monthly mortgage payment will be $8.
So, if you purchase a home for $250,000 with a $50,000 down payment – borrowing a total of $200,000, then a good estimated total monthly PITI payment would be roughly $1600.
But don’t forget to add your homeowners association dues to that monthly payment.
What If I Pay Taxes and Insurance Separately?
Well now we’re at the easy part. If you elect to pay taxes separate from your mortgage, the cheat sheet is reduced from $8 per $1000 down to $6 per $1000.
So there you have it. $8 for every $1000 borrowed.
Again, please keep in mind that this is not going to give you an EXACT payment. You may be purchasing a property with higher real estate taxes or your insurance premiums may be higher than average depending on the state you live in.
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How to Shop Mortgage Rates
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