Hidden Secrets Behind Mortgage Payments

If you think that mortgage payments are just the amount of your home, think again.

17:16 11 March 2013

In order to find out all the details about what your mortgage payment entails, you’ll probably have to read all the fine print, but here are a few things which may commonly be included in the payments:

• Part of the principle loan amount.

 

• Interest on the principle.

 

• Taxes on the amount.

 

• Private mortgage insurance. 

 

There may be a number of other types of costs rolled up into your mortgage, so if you are wondering what is included ask the mortgage officer about the mortgage payments. 

 

They should be able to help decipher the legal jargon of the fine print to make things a little easier as well. If there is something which doesn’t sound right, ask for more information. Certain things included may actually be optional, such as the private mortgage insurance, so don’t hesitate to ask for details and explanations. 

 

You can make sure that your money goes where it is supposed to and is used as effectively as possible if you find out what your mortgage payment consists of. As a side note, if you are just searching for a mortgage, compare not only the terms of the mortgages, but also the payment amounts. 

 

If you have a variable rate mortgage, ask for estimates of what the mortgage payments will look like at a higher interest rate so you have an accurate comparison and you’ll know what to expect when the lower interest rate on the mortgage is raised. 

 

Many mortgages have a 5.79per cent interest rate later in the mortgage and a lower interest rate at the beginning of the mortgage. Find out what that will mean for you in the future and see if they are including compounded interest in the payment.