Unless you can pay with cash, you’ll need financing to pay for your home. As with any purchase it’s important to know what you’re paying for. Here’s how a mortgage payment breaks down.
Your principal is the amount of money you borrowed from the lending institution. With fixed-rate mortgages this amount will not change over the life of the loan. Over time however, the principal will begin to make up a greater percentage of your mortgage each month.
This is the cost of being able to take out a loan. For the early duration of the mortgage, interest will make up a huge majority of each monthly payment.
Roughly one-twelfth of your mortgage payment will go towards property taxes.
A portion of your closing costs is the price of one year’s worth of homeowners insurance. After that, each mortgage payment will use about one-twelfth of its funds to go towards homeowners insurance.
While there are always exceptions, you can expect your mortgage payment to at least cover this much. When buying a home with less than twenty percent down, plan on paying mortgage insurance, which is a fee that protects your mortgage lender against borrower default.
Speak with a member of Gore Group Realty today to answer all of your Henderson real estate questions.