Episode 003 1995 - 96 Season

| Wind Reinforcements | Rafter Clips | Cut-in Roofs | Truss Roofs | Truss Floors | Treating Water Stains | Calking Bathtubs | How Much Per Month? | |

To order a Video Tape, call 1-800-TO-BUILD and ask for Episode #003.


 Mortgage Moment - How Much Per Month

Michael Holigan : Hey, last week we started covering the three big questions: how much down, how much a month and how do I qualify? Well welcome back this week, because we're going to cover how much per month. And we need a lot of assumptions to figure this out, so we're going to start with a sales price of $100,000. Now we're going to say that we put five percent down, which would be $5,000. It's going to leave us a loan balance or a loan amount of $95,000. For this example, we're going to use a mortgage rate of eight percent a year over 30 years fixed rate. Then we come up with taxes. Now, you may want to pay the taxes yourself. You may not want to pay any taxes at all, but the mortgage company wants the taxes paid and the way they're going to do that is they're going to collect the money. They're going to take the tax rate, and we used 1.2 percent for this, for the city, school and the county on our example, 1.2 percent, they're going to say $1,200 a year because they multiplied that times the sales price, divided by 12 months, so they're collect $100.00 a month. At the end of the year, they're going to pay that $1,200. That's because they don't ever want your house taken away and sold in a tax sale because that's the collateral on the mortgage. Next comes home owner's insurance. And just like the taxes, their going to collect your home owner's insurance. Now this amount, $480 that we use for example, or $40.00 a month is set by you and the insurance company. You need to get with them, decide what your deductible's going to be, how much is going to be on there and they'll give you that. The mortgage company will collect it and then at the end of the year, they're going to pay the $480.00. Next comes mortgage insurance. I don't like it, you're not going to like it, but you have to pay mortgage insurance. And what this does is it protects the lender. If you put down a low down payment, like a five percent loan, and you don't pay off your mortgage, the mortgage company's going to have to step up and pay part of that money. The mortgage insurance insures part of their losses. Now, on our chart it was $720.00, it gave us $60.00 a month. Go to our principle and interest, $697.00 a month. That's determined off our mortgage rate, the 30 year loan with a loan amount of $95,000. You can do that on a calculator or on a financial table. Next comes our taxes. That was $1,200 a year divided by 12 months, so they're collecting $100.00 a month. After that, insurance, they're also collecting for your escrow $40.00 a month for that $480.00 insurance bill that's going to come up at the end of the year. Next is mortgage insurance, $60.00 a month they're collecting for that $720.00. Total that all out, $897.00 a month. Now, as you can see, there's a lot of things that can affect this payment. What are your tax rates, how much insurance are you getting for the house, but we can show you different ways to lower that, with interest rates, plus special programs that are available, so come back with us over the next few weeks. We're going to try to get this payment down even some more.

Episode 003 1995 - 96 Season

| Wind Reinforcements | Rafter Clips | Cut-in Roofs | Truss Roofs | Truss Floors | Treating Water Stains | Calking Bathtubs | How Much Per Month? | |

To order a Video Tape, call 1-800-TO-BUILD and ask for Episode #003.