Breaking Down A Typical Mortgage Payment

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Breaking Down A Typical Mortgage Payment

8-24-2017
Excel Financial Group, LLC
Elizabeth Johnson
1379.97
One Thousand Three Hundred Seventy Nine and 97/100
Elizabeth Johnson
Mortgage Payment
30 YR.
15 YR.

Principal

The principal is the amount that pays back and reduces the loan balance. As time passes, the amount you pay in principal each month will increase as the interest amount decreases. The number used here reflects the average principal payment in the first 12 months of the loan.

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Interest

Interest is the ongoing cost of borrowing the money. As time passes, the amount you pay in interest each month will decrease while the principal amount increases. The number used here reflects the average interest payment in the first 12 months of the loan.

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Taxes

Real estate or property taxes are held in an escrow account. The estimate here is based on 1.25% of the property’s sales price. Actual taxes may vary.

This presentation assumes that the loan amount represents 80% of the sales price.

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Insurance

Homeowners or hazard insurance payments are held in an escrow account. Some loans also have mortgage insurance. The estimate here is based on a default factor of $3 per $1000 of the sales price. Actual insurance costs may vary.

This presentation assumes that the loan amount represents 80% of the sales price.

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More Details

Principal, Interest, Taxes and Insurance are the basic components of a typical monthly mortgage payment. Some properties may also have a common/maintenance charge (condos and co-ops), and some homes have a homeowner’s association fee (HOA). Some loan programs will also require Mortgage Insurance (MI) or Private Mortgage Insurance (PMI). Beyond your regular payment, it is wise to budget for maintenance expenses. The cost of upkeep will vary with the age, type, size, structure and materials used.

This presentation assumes that the loan amount represents an 80% loan to value ratio. If you select an $80,000 loan amount, for example, the tax and insurance costs are based on a sales price of $100,000.

change parameters

Here you can change the default parameters used in this presentation.

Tax Factor
Enter the percentage of the sales price that will reflect the annual real estate taxes for the property you are calculating for.

Insurance Factor
The annual Homeowner's or Hazard Insurance amount is calculated for you based on a default factor of $3 per $1000 of sales price. You can lower or raise that factor to reflect your circumstances.
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