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What is the Real Cost of a Mortgage? debt consolidation home equity loan

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The total cost of a mortgage is comprised of four main elements:

1. Principal debt consolidation home equity loan
2. Interest
3. Taxes
4. debt consolidation home equity loan Insurance

PITI is part of the formula that mortgage lenders use when calculating your affordability ratios. debt consolidation home equity loan Many times home buyers ignore these debt consolidation home equity loan additional costs when figuring how much of a home they can afford.

Principal debt consolidation home equity loan
Principal represents the amount you borrow, which has to be repaid over time.

Interest
Interest is the cost that debt consolidation home equity loan mortgage lenders charge for the use of their money during your repayment schedule.  debt consolidation home equity loan

Taxes
Taxes are an assessment that local governments collect on property to pay for local services. debt consolidation home equity loan Property tax rates will vary by location and can affect your total cost and affordability.

Insurance debt consolidation home equity loan
Homeowner's Insurance will be required to replace the value of loan in the event of a disaster such as fire, debt consolidation home equity loan earthquake, flood, etc.

Understanding Escrow
Property taxes and insurance costs must be collected and paid when they are due. debt consolidation home equity loan

 

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