Mortgage Payments explained (Part One)  12/2/12

by | Dec 3, 2012 | Real Estate | 0 comments

***if you know anyone who is thinking about buying a
home, our next classes are
:

Monday, December 10, 2012, from 5pm-8pm,
at the Marshall Center, conference room at 1009 E. McLoughlin Blvd. (kitty
corner from Clark College)

Saturday, December 15, 2012, from 1pm-4pm at the
Vancouver YMCA located at 11324 NE 51st Circle (corner of SR-500 &
112th/Gher Road). 

Remember….with reservation…we will throw in lunch,
or dinner!  🙂 …we also have other class dates/times…check out the
website

Please go to www.learningtobuyahome.com, or www.traciedemars.com for information on ALL upcoming
Free Community Home Buyer Classes.  I do keep all updated information, and
directions there… I would love to hear from you about when you might like to
see the classes.  These classes are for you, so please, I love your comments and
feedback!!  🙂 ***

Happy
Sunday~

What a lovely, wet day!  🙂  We didn’t do ANYTHING today, but layed around,
watched TV, and spent time together as a family.  That is why you will be
receiving this email Monday morning instead.  We don’t always get to do this as
my family is so busy.  I know…we are always so busy…all of us.  Sometimes we
just need to lay low and relax…it was a good day.  🙂

So, in the home buyers class this week I had a couple of good questions come up.
One of the questions was about mortgage payments, and how that worked.  So,
perfect timing!  🙂  This is a lot of information so I am going to break it up
into two emails for this week and next.

Mortgage Payments  (Part One)

There are four parts to your mortgage payment, and this is called,  P.I.T.I.
Principal
– the amount that you pay on the principal amount borrowed every month.
Interest
 the amount that goes toward the interest that the bank charges you
for the amount you borrowed.
Taxes-
the amount that goes toward your escrow account to pay your taxes.  More on
taxes later…
Insurance
 the amount that goes toward your escrow account to pay your
homeowners insurance.

(Mortgage Insurance is a fifth component to your payment.  This will be an
upcoming blog….)

The  Principal and Interest part of your mortgage actually stays the
same, but how it is split changes through the life of your loan.  In the
beginning of your loan you will pay more interest than principal, but as the
loan matures, that will change until you pay more in principal and less in
interest at the end of your loan.  Now, you have every right to pay extra on
your principal loan amount whenever you want.  I always put extra money toward
my principal loan amount every month when I pay my mortgage.  This will decrease
the length of my loan, and the amount of interest I actually end up paying.

The Taxes and Insurance part of your mortgage can, and will change
though.  As your home increases in value the tax assessed value of it will also
increase, which will increase the amount of your yearly taxes, which then will
increase your insurance amount.  You always want to make sure that, as your home
increases in value, you are talking with your home owners insurance agent to
make sure you have enough insurance on it.  Your home owners insurance protects
you in case of a fire, or an event that is outside of your “care, custody, and
control”.  It is like having insurance on your car in case of loss.

Every year you will receive a letter from your escrow account letting you know where
you stand regarding the amount you are paying towards your escrow account for
your taxes and insurance.  Sometimes you have too much and you get a
check….but don’t be too excited because if this happens it means that your
home is losing value, and we don’t want that.  Usually you are going to get a
notice that your home has increased in value so that you need to put more money
into your escrow account.  You have two options of doing this….one by writing
a check to your escrow account one time (in which case your payments will now be
X amount of dollars), or you can choose to do it monthly (in which case your
payments will now be X amount of dollars).  All of this information will be in
that letter, but again….if you have questions, please feel free to call your
agent!  Yes….I know you already bought the home, but remember that we are here
to help you….for the long haul!!  😀

When your agent is initially talking with your lender, one of the questions s/he
should ask your lender is what tax dollar amount the lender used for your
pre-approval.  This is important because if you are looking at a home with a
higher tax amount then you are actually pre-approved for LESS….for the same
mortgage payment, but if you are looking at a home, or area with lower taxes,
then you are approved for MORE…with the same mortgage payment.

Typically your homeowners insurance should run about, or around $500 a year.  Of course,
this also depends on if you need flood insurance which will raise this amount.
One thing that every home owner should think about is earthquake insurance.
Earthquake insurance is not required, but did you know that we live in the area
that is #1 at risk for a very large earthquake in the near future???  Earthquake
insurance is not part of your regular home insurance anymore because of this.
It’s crazy….when I bought my home about 11 years ago, earthquake insurance was
part of my regular homeowners insurance, but now, because of this risk, it no
longer is, and must be purchased separately.  As a pre-caution, I urge you to
consider this.  You don’t have to do it right now as you are in the process of
buying your home, but once you move in, contact your homeowners insurance agent
and talk to them about earthquake insurance, and if you have dogs, a trampoline,
kids, a pool, etc…ask also about an umbrella insurance policy to cover those
things that your regular homeowners insurance might not….just to be on the
safe side…  as you know…these classes, and this blog is all about CYA!!!
😀

Enjoy the weather, and I look forward to talking with you soon and helping you to find
a great home!!!  Thank you for your referrals as well….I couldn’t do this
without you!
😉

Hope this helps….as always, give me a ring, text, email, or facebook me if you have
any further questions!

Please call, email, text, or even facebook me (at Tracie
DeMars Real Estate) 
anytime
with any questions, or if there is anything I can do to assist you with your
home buying adventure! As your buyers agent, I am, as always, here to help!!
😀

Thank you again for your business and for your referrals!

…as always…if you have already purchased a home, or no longer would like to receive these emails
from me, please let me know and I will be happy to remove you from receiving any
more.

Thank you again for attending the home buyer education classes, and I hope that you will continue to refer the
classes out to your friends, family, and co-workers. Upcoming class dates and
times are located at www.freehomebuyerclasses.com. Just click on the link
on the left hand side. Or you can go to www.learningtobuyahome.com and click the
links.

We appreciate your referrals and word of mouth! Also, if you have somewhere that we can place the
flyers at, please let me know….
:-D

Next Week:    Mortgage Payments & how they’re
Paid  (coming up – Inspections…explained & Mortage
Insurance….explained)

Last Week: The Do’s & Don’ts of Buying a Home (Mortgage persective)

Remember that you can always go to ‘Tracie DeMars Real
Estate’
 on Facebook for all of my weekly blogs and upcoming
class dates/times/locations
. I post the weekly blogs on there as
well.

Have a great day, and I will talk to you soon,
;-D

Tracie DeMars / Realtor

ReMax Equity Group
License# 81289
Vancouver, WA
360-903-3504

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