Your Questions, Answered: “What Does my Mortgage Cover?”

Calling all home buyers! If you’re thinking about buying a home any time in the future, this is the blog for you. Red Robin Group will be answering all of the questions you have about buying a home, whether it’s your first time or your last. You may even find answers to questions you didn’t know you had. We’ll feature an answered question in our E-Bird every month, but you may also want to check back here on our website to stay on top of the latest buyer info. We’ll kick it all off with a “simple” question about your home mortgage…

What Does My Mortgage Cover?

You’ve found a home online that you love! You just have to make sure you can afford it. So, you pull up a simple mortgage calculator, type in the purchase price and interest rate that you saw on a lender site, and viola –  instant success! But there’s more to it than that…

Many homebuyers come to me with the understanding your mortgage is made up of principal and interest, but there is actually more to it. Most loans have 4 parts: principal, the repayment of the amount you actually borrowed; interest, the cost of borrowing the money; homeowners insurance, a monthly amount to insure the property against loss from fire, smoke, theft, and other hazards required by most lenders; and property taxes, the annual city/county taxes assessed on your property, divided by 12. Because of the way loans are structured, in the first years you’ll be paying mostly interest in your monthly payments. In the final years, you’ll be paying mostly principal. The flip side is that if you itemize your deductions you can write off the interest and the taxes! This is one of the many great reasons for buying a home!! Hope this helps…I’ll see you next month when I’ll be tackling the single question I get asked most often about taxes.

posted: Jul 14, 2011 | No Responses

Posted by:  Wakamo & Associates

Melissa Wakamo and her dynamic team of agents and support staff provide buyer and seller clients with exceptional service and proven results. Since the start of her real estate career in 2004, Melissa has proven to be a true advocate for her clients and has consistently performed in the top 1% of agents

“When I started my real estate career, I wanted to work in my local community and get to know my neighbors. Now, I realize how important that local expertise is to our clients. At Red Robin REALTORS®, all of our agents are specialists in working with buyers and sellers in Atlanta’s intown neighborhoods.”

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