The Porter team

What's Included in a Mortgage Payment?

Many first time buyers simply use a mortgage calculator to find out how much a monthly payment will be but are then shocked with the bill from the lender turns out to be more than they thought.

When applying for a mortgage loan there are many details that lenders look at.  Not only do they expect you to pay the actual principal amount but the interest, taxes and insurance on a home as well.  It's important to know all these figures ahead of time and plan accordingly.  Don't assume that the simple pay off amount is what you will need each month.

Here are some costs to consider when paying on a home loan:

 - Principal - This is the actual amount you owe for the cost of the loan.  It is typically amoratized into specific payments and as the principal increases each month the interest goes down causing the payment to stay the same.

 - Interest - This is the cost of the loan itself.  It is what the bank is charging you for borrowing their money.  It can range from 4% to 10% of the loan or more depending on the current market, your financial situation and credit score.

 - Taxes - This may or may not be added to your payment each month but make sure you know either way before signing.  A smaller amount built into the payment each month may be easier to handle that a large payment dues twice a year.  This can typically be between $1000 - $10,000 or more per year depending on the value of your Southern Utah real estate.

 - Insurance - This is your homeowners insurance and possibly a special insurance such as flood or other natural causes.  Each home has been evaluated on having certain insurance so make sure your insurance company knows everything they can about your home.  This can possibly save you money. This can also be included in your payment and needs to be arranged ahead of time.

All these costs can add $200 - $500 or more to your monthly payment.  Not to mention other costs that might increase such as utilities or home owner dues.  Make a budget of all these ahead of time so you are well covered and feel comfortable about purchasing your St George home.