Mortgage Math
If a house costs $465,000, this is the amount of the down payment required to secure a 20% down payment mortgage.
What is $93,000?
These two professionals are necessary for negotiating the sale and securing a loan when buying a house.
Who are the real estate agent and the lender?
This is the fixed amount you pay out-of-pocket when filing a claim for damage or loss before the insurance company pays.
What is the deductible?
This type of account is used by the lender to collect and hold monthly portions of the homeowner's insurance premium and property taxes.
What is an escrow account?
This is the percentage of ownership one has in a property, often calculated using the current value and the amount still owed.
What is equity?
On a $304,000 loan, this is the monthly interest rate if the annual fixed interest rate is 6.30%.
What is 0.00525?
This is the term for the process where one party signs many papers to officially transfer ownership of the real estate and pay remaining costs.
What is the closing?
This is the term for protection for claims up to a certain dollar amount, such as a dog bite or a slip-and-fall on your property.
What is liability coverage?
This is the term for the worth of a home as determined by a municipality for property tax calculations.
What is the assessed value?
Interest is calculated based on this large amount at the start of a mortgage, causing early payments to be "interest-heavy."
What is the current principal or unpaid balance?
The monthly property tax portion of the escrow payment, based on an annual tax bill of $5,282.
What is $440.17?
You must be prepared to supply your ID, Social Security number, and this specific financial document for the last three years to a lender for mortgage pre-approval.
What are tax records or bank statements?
This type of damage is NOT covered by a standard homeowner's insurance policy.
What is flood damage?
This is the annual property tax owed if the assessed value is $380,000 and the MIL rate is 13.90.
What is $5,282?
The coverage under a homeowner's policy called "Dwelling Amount" does not include this part of the property.
What is the land?
For a $520,000 loan, 2 "points" would cost this much money.
What is $10,400?
This is one of the two typical contingencies included in a contract to buy a home, besides a satisfactory home inspection.
What is the home appraisal for at least the agreed-upon selling price?
A discount on your annual premium can be obtained by having multiple policies with the same company or by having this feature near your home.
What is proximity to a fire hydrant or other emergency services?
Property taxes are calculated as the MIL rate multiplied by this fractional part of the assessed value.
What is one-thousandth of the assessed value?
This type of insurance is added to the monthly mortgage payment if the borrower does not have at least 20% equity at the time of purchase.
What is Private Mortgage Insurance (PMI)?
Eddie's property is valued at $485,000, and his current mortgage balance is $400,000. This is his equity expressed as a percentage.
What is 17.53%?
The reason a lender allows a lower interest rate for a 15-year mortgage compared to a 30-year mortgage.
What is less risk for the lender, and they get their money back faster? Incentivizes the buyer to choose a shorter mortgage term.
This means the insurance company will pay up to the current cost to replace your home or its contents if they are damaged or destroyed.
What is full replacement cost?
The annual property tax bill for a property with an assessed value of $192,000 and a MIL rate of 14.00.
What is $2,688?
This relationship exists between the deductible and the premium for homeowner's insurance.
What is: the higher the deductible, the lower the premium?