What is the Real Cost of a Mortgage? fha home loan
from servicemagic.com
The total cost of a mortgage is comprised of four main elements:
1. Principal fha home loan
2. Interest
3. Taxes
4. fha home loan Insurance
PITI is part of the formula that mortgage lenders use when calculating your affordability ratios. fha home loan Many times home buyers ignore these fha home loan additional costs when figuring how much of a home they can afford.
Principal fha home loan
Principal represents the amount you borrow, which has to be repaid over time.
Interest
Interest is the cost that fha home loan mortgage lenders charge for the use of their money during your repayment schedule. fha home loan
Taxes
Taxes are an assessment that local governments collect on property to pay for local services. fha home loan Property tax rates will vary by location and can affect your total cost and affordability.
Insurance fha home loan
Homeowner's Insurance will be required to replace the value of loan in the event of a disaster such as fire, fha home loan earthquake, flood, etc.
Understanding Escrow
Property taxes and insurance costs must be collected and paid when they are due. fha home loan
