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

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

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

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

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

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

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

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

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

 

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