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What Determines How Much Your Home Mortgage Payment Will Cost?

Qualifying for a home mortgage has never been easy; if you want to buy a house, you either need generational wealth or an extraordinary stroke of luck. Today, a disproportionate share of homebuyers have their parents contribute to the down payment, or else the mortgage loan principal would be so big that lenders would refuse to issue the loan. Even with high-income jobs and college degrees unencumbered by student loans, they still cannot afford the monthly payments without down payment assistance from their folks. Where does that leave the rest of us, then?  

Whether or not this comes as any comfort, only some factors that influence your monthly mortgage payment relate to your individual financial circumstances; other factors are even farther outside your control. If you have a mortgage, consider yourself lucky, although gratitude is not the first emotion that comes to mind when you think about how little money is in your bank account compared to how much you must pay toward next month’s mortgage payment.  You have more control over your other debts, including the right to discharge the ones you are sure you cannot pay. An Oakland Chapter 13 bankruptcy lawyer can help you discharge your eligible consumer debts so that you can keep up with your mortgage payments and keep your house.

Mortgage Affordability is About More Than Just Your Credit Score

A home mortgage loan has four elements, represented by the acronym PITI.  While you are making payments on your mortgage, you usually do not think very much about how much you are paying toward each component since they are all bundled into one monthly bill.  These are the four components of your mortgage statement:

  • Principal – This is the amount you borrowed when you bought the house.  It is the purchase price for which you signed the contract minus the down payment.  To reduce your principal amount, pay the biggest down payment you can, and pay more than the monthly minimum on your mortgage each month.
  • Interest – This is the compound interest that you pay throughout the life of your mortgage loan.  Whether your mortgage has a fixed rate or an adjustable rate, you can save money on interest by borrowing less principal, which you can accomplish by buying a less expensive property or placing a bigger down payment.  You can also decrease the interest you pay by paying down your principal more quickly by paying more than the minimum with each monthly installment.
  • Taxes – The property taxes are calculated on an annual basis and broken into 12 installments for inclusion in your monthly mortgage statements.  The amount is based on the assessed value of your house, which changes each year.
  • Insurance – Some lenders require you to buy homeowners’ insurance, and the premiums are divided into installments and bundled into your mortgage statement.

Contact the Law Office of Melanie Tavare About Affordable Home Mortgages

A debt relief lawyer can help you assess your debt situation and make realistic plans about qualifying for a home mortgage. Contact the Law Office of Melanie Tavare in Oakland, California, or call (510)255-4646 for a case evaluation.


What does PITI mean, and how does it affect your mortgage? (yahoo.com)


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