When determining your home buying budget, consider your entire PITI payment rather than only focusing on principal and interest. (I) Insurance: Homeowners insurance and, if required, private mortgage insurance premiums (PMI) on a conventional loan.(T) Taxes: Property taxes required by your city and county government.If the same $320,000 loan above has a 4% rate, then you’ll pay $12,800 for the first year in interest repayment (I) Interest: The amount of interest you’ll pay to borrow the principal.If you buy a home for $400,000 with 20% down, then your principal loan balance is $320,000 (P) Principal: The amount you owe without any interest added.Your mortgage payment consists of four costs, which loan officers refer to as ‘PITI.’ These four parts are principal, interest, taxes, and insurance. Here are tips to get your best mortgage rate Shop for a lower rate: Rate shopping doesn’t have to take long, and it’s well worth the savings.However, you will pay more in total interest over the life of the loan Longer loan term: A longer loan term means lower monthly payments.Avoid private mortgage insurance: When you put at least 20% down on a conventional loan - or 20% home equity on a refinance - you can avoid paying monthly private mortgage insurance premiums (PMI).Also, the best mortgage rates generally go to borrowers with larger down payments, among other qualifying factors Bigger down payment: Putting more money down means you’ll borrow less.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |