Mortgage payments explained (Part Two) 12/16/12

by | Dec 16, 2012 | Real Estate | 0 comments

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

Saturday, January 5, 2013, from 9am-12pm at the Vancouver YMCA located at 11324 NE 51st Circle (corner of SR-500 & 112th/Gher Road).

Thursday, January 10, 2013, from 5pm-8pm, at the Marshall Center, conference room at 1009 E. McLoughlin Blvd. (kitty corner from Clark College)

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~

Here we are….one week closer to Christmas.  Are you done shopping?  Here is my confession…I haven’t even started!  🙂  Yep, there is the truth of it.  Of course, it is difficult to want to go shopping right now with all that has happened this week.  Sometimes I wonder if the world hasn’t gone crazy….or is it that we just hear more about it these days with the news coverage?  I do admit to holding my family a bit tighter this week….

I have had a few folks request shorter blog entries, so in case you haven’t noticed, I have been trying to break the information down in more digestible pieces.  🙂  As promised the a couple of weeks ago, we will talk more about the second part of mortgage payments, and how mortgage payments are paid.  Next week we will talk about your escrow account.

So let’s break down mortgage vs rent…..
When you pay your January rent, you pay to live there for the month of January…from the 1st to the 31st.  When I pay my January mortgage, I was actually paying for the month of December.  Nope…not kidding, I really am, and you’re like, “what? how?”  🙂  Well, rent is paid ahead of time, but for mortgage, you can’t be charged for what you haven’t accrued, so when you pay your mortgage, you are actually paying for the month just past.  Mortgage is technically due on the first, but it isn’t considered late until the 15th of the month, and which point you will be charged a late fee which is usually about 5% of your monthly payment.  Did you know that if you pay your mortgage at the 1st of the month though you are actually paying the most in interest?  I was told this from someone I know who works at a bank….that ‘supposedly’ if you pay at the the last day of the month (for example: on December 31st for January) then you are actually paying the most in principal, and the least in interest that you can in your regular payment.  Interesting…

So… why do you need to know this at closing?  This is important knowledge when you are writing up an offer because it has to do with how much your closing costs are going to be.  Some examples….

If you were to close on your new home on March 25th, then you will be paying for 6 days of interest as part of your closing costs for the rest of March, and your first payment is due May 1st for the month of April.

If you were to close on your home March 10th, then you will be paying for 21 days of interest as part of your closing costs for the rest of March, but your first payment is due (still) May 1st for the month of April.  Does that make sense?

If you close ANY day in March…whether the 1st or the 31st….your first mortgage payment is due May 1st.  If you close earlier in the month then your closing costs/downpayment may be a bit higher as you are including that months interest as part of that downpayment….but your first payment is further away.  Some people like this as it gives time to put a bit of money aside for savings.

If you close later in the month, you have less to pay for interest as part of your closing costs/downpayment, but your mortgage payment will be due sooner.  Some people like this because it is just going from one rent payment, to your first mortgage payment, and it is a smooth transition.

Whether you choose to close sooner, or later, is up to you, and it is good to talk with your lender about how much that additional interest may cost you in your closing costs/downpayment.  Usually when doing your paperwork, and your pre-approval, your lender will figure your fees based on as if you are closing on the 15th since…number wise…that is a safe bet and won’t affect you too much either way if you close at the beginning, or at the end.

When writing up an offer this is always something I spend some time on when talking about when you might like to close as it isn’t something that people realize….and no one ever explains it.  If you have any questions about this, please call or email me and I will be glad to help!!

You can always go to my Facebook page at:  Tracie DeMars Real Estate, or to any of my other blog pages for all of my home buyer education blogs.  I want to help you understand how the process works….  🙂

I hope all of this helps you understand how your mortgage works!  Call, email, text, or even facebook me if you have any questions!  That is what I am here for as your buyer’s agent!

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:    Escrow …explained (coming up – Inspections…explained & Mortgage Insurance….explained)
Last Week:  Pre-approvals….explained

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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