If you’re going to be responsible for paying a mortgage over the next 30 years, you should know more about mortgage payments. A mortgage is a home loan that allows the borrower to pay back in monthly payments. It has three basic parts: a down payment, monthly payments and fees. Since mortgages usually involve a long-term payment plan, it’s important to understand how they work.
• The down payment is the up-front amount you pay to secure a mortgage. The larger your down payment, the better your financing deal will be. You’ll get a lower mortgage interest rate, pay fewer fees and gain equity in your home more rapidly.
• The monthly payment is the amount needed to pay off the mortgage over the length of the loan and includes a payment on the principal of the loan as well as interest. There are often property taxes and other fees included in the monthly bill.
• The fees are various costs you have to pay up front to get the loan.
The right time to apply for a mortgage loan may also be something many people are not aware of. According to Family Trust VP of Mortgage Services Brett Harvey, recently, the Federal Reserve felt that a recent decline in inflation as the economy continues to grow is reasons not to increase interest rates and gave no indication it was in a hurry to move rates in either direction.
This is good news for our members as the summer buying season heats up. The low rates offset some of the pain of higher home prices due to tight supply right now. The average 30-year fixed-mortgage rate is 4.02% and the average for a 15-year term is 3.41%.
Family Trust understands that choosing the right home and right mortgage means doing your homework. While we can’t pick the right house for you, we can help you choose from a variety of home loan options. If you have any questions, please visit a branch or call us today at 803. 367.4100 ext. 3014