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What is the Real Cost of a Mortgage? home construction loan

from servicemagic.com

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

1. Principal home construction loan
2. Interest
3. Taxes
4. home construction loan Insurance

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

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

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

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

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

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

 

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