Laws dictate that a lender is allowed to collect, at closing, 2 months’ worth of your estimated yearly insurance payments and property taxes.Īfter closing is completed, you will have to remit one month’s worth of the total annual amount along with every monthly payment toward your mortgage. This is money that is put aside each month for a third party to use on your behalf in making payments toward your home insurance premiums and property taxes. ![]() Late fees, insurance payments, deferred interest, and things of that nature may be present in the final amount owed.Įscrow has a very specific purpose. With that being said, it’s important to remember that other charges and fees may be included in the total amount needed to pay off your loan. ![]() As such, it goes toward repayment to your mortgage lender. Interest is the percentage that is charged to your loan balance. Interest is the missing component to your mortgage principal that tells you the total amount that you will be paying back. As you will discover in the “Interest” line below, you should plan on the total amount owed being greater than your principal balance. The reason that your principal mortgage doesn’t include interest is that interest continues to be collected all the way until closing. For that, you will need to locate the line item listed as “Interest.” As such, your mortgage principal does not include any interest. It’s important to understand that this is the amount of money owed that you borrowed on your home. Once you have identified your line items, read on to find out what each of them means. There should be several key items, including principal and escrow. In looking over your mortgage statement, you should see a breakdown of all of your charges. ![]() But do you understand what these are? If you have any confusion over your mortgage, you’re not alone, and because of that, the finance experts here at Seek Capital are ready to help clear things up so that you have a firm grasp on the matter. If you have taken out a mortgage, you have likely seen terms like principal and escrow. Much more than a simple house payment, mortgages include taxes and fees that need to be considered. Regardless of which type of payment you make on your mortgage, you know it’s a significant amount of money.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |