Categorized | Financial

Understanding Your Mortgage 101

Chateau Mortgage of Baton Rouge services mortgages in the state of Louisiana and provides services to new homeowners and existing homeowners. Whether you are buying a home for the first time or refinancing your home, we are here to help you understand your mortgage, the current interest rates, and the length of your mortgage including the amount of your house payments, and the very best way to apply for a mortgage, or to refinance your existing mortgage that will be an advantage to you.

Understanding your mortgage is imperative for a new homeowner. Shopping to get the right interest rate is a preparatory step in taking out a mortgage for your home. It can mean thousands of dollars over the length of the mortgage. For example, 5% of $1000 would equal $50.00, whereas 3% would equal $30.00. So, it’s important to shop for a good interest rate when buying your home because these amounts add to the amount of the monthly house payment.

There are three things that a person needs to understand when buying a new home and setting up a new mortgage; the amount of principle, the percentage of interest rate, and the length of the mortgage – the amount of months in the mortgage. Number one, is the principle amount of the actual payment, this will be the basis for the monthly house payment. For example, on a $100,000 home paid off over a period of 30 years, a person will be able to figure out the amount of principle per month by simply taking the amount of months into the cost of the home to get the principle per month.

The next part is the interest rate added to the principal amount. This increases the monthly payment by a substantial amount. A lender gives you the amount of money you need to purchase your home in the form of a loan. Many times they require a substantial down payment up to 20% of the cost of a home. These rates are sometimes standard, but a prospective new homeowner can shop around for a home mortgage loan that has a varied down payment upfront cost. Chateau Mortgage of Louisiana can walk you through the steps and help you understand your mortgage. We are here to help you.

Every house is evaluated to determine the amount of taxes that are due in that particular county or Parish of the state. These taxes sometimes are paid biannually, but most times annually. The local county, or Parish tax department, will send out a statement one or two months prior to the due date so the new homeowner can plan their budget around a specific date every year. Sometimes the tax rate is re-evaluated depending on the cost of school projects in the area and other factors, including the depreciation of the real estate.

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