A clear explanation of the costs that may make up your total monthly housing payment and why the payment can vary from one property to another.
The interest rate is only one part of a monthly housing payment. The total payment can vary based on the property, loan program, down payment, taxes, insurance, and other costs.
Principal: the portion of the payment that reduces the outstanding loan balance.
Interest: the cost of borrowing money, based on the loan amount, interest rate, and repayment term.
Property Taxes: usually collected monthly through an escrow account and paid to the local taxing authority. Taxes vary by property and location.
Homeowners Insurance: coverage for the home and certain risks. The premium varies by property, coverage, insurer, and other factors.
Mortgage Insurance: may be required depending on the loan program, down payment, and loan-to-value ratio.
HOA or Condominium Dues: paid separately in many cases and not always included in the mortgage payment shown by a lender.
Why two similar homes may have different payments: two homes with the same purchase price can have different total payments because of property taxes, homeowners insurance, HOA dues, mortgage insurance, loan program, or down payment. Dan will calculate the payment for the specific property before you make an offer.
Want a payment based on a specific home? Send Dan the property address and estimated purchase details. He will prepare a personalized estimate that includes the costs applicable to that scenario.