1)I am planning to buy a new home for the first time . What expenses(payment) would be added to my home mortgage like home insurance, mortgage insurance etc?
2)How can I lower my monthly mortgage? Some of my friends told that I have to pay at least 20% down payment rather than paying those amount after one year or so to lower monthly mortgage .
Thanking in advance.
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The lender adds Property tax and homeowner insurance premiums to your monthly bill. The larger your down payment the less you borrow the smaller your monthly payment. if you do less then 20% the PMI insurance is also added. You pay that till your equity equals 20% Impossible to find a mortgage lender with less than 20% unless it is FHA mortgage.
In addition to mortgage insurance there is homeowner’s (fire) insurance, and property taxes.
Property taxes, homeowners insurance, mortgage insurance, can all be drawn from the escrow account of your mortgage, or you can arrange to pay them separately. The size of your down payment, and your credit score can determine your monthly payment, your credit score helps in determining your interest rate, the lower your interest rate, the lower your monthly payment.
At a minimum, your monthly payment will include: loan payment (principal + interest), property taxes, property insurance, private mortgage insurance if you paid less than 20% down. You might also have to pay homeowner association/condo dues. In my neighborhood, we also pay for trash pickup.
Once you own the house, count on spending about 1% per year of the house’s costs on various repairs, maintenance and improvements to the home.
Only PMI (Private Mortgage Insurance) will not be required if you put down 20%.
Other’s like home owners insurance, proterty tax will be part of it apart from Principle + interest component.
Home owners Insurance can be coupled with the car insurance to get some discount on both.
Property tax is dependant on value of your house and rate can be found on your city/county web-site.
PITI
Principal
Interest
Taxes
Insurance
You’ll have to pay both property taxes and homeowners insurance, regardless of what you put down.
To avoid private mortgage insurance (PMI), you’ll need to put down 20%, or break up the loan so the first doesn’t exceed 80% of the purchase price.
Your monthly mortgage will also come with a lower interest rate if you put down more money, as the adjustments to fee will be lessened.