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What's in a mortgage payment?  The 5 parts explained

7/25/2015

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Upcoming Free (& non-promotional) Home Buyer Classes:                                                                                        

Saturday August 1st , from 9am-12pm
       Marshall Community Center, conference room 
       1009 E. McLoughlin Blvd, Vancouver WA (kitty corner from Clark College) 

Thursday night, August 20 , from 5pm-8pm
       Marshall Community Center, conference room  
       1009 E. McLoughlin Blvd, Vancouver WA (kitty corner from Clark College)  

Saturday, August 22nd, from 11am-2pm  
        Vancouver YMCA, conference room  
        11324 NE 51st Circle, Vancouver WA (corner of SR500 & Gher Road/112th Ave) 
 
....we also have home seller classes available too...link on left on website

 ...if these dates/times don't work for you, we have others.  Check out the website for more class dates, times, and locations.  PLEASE always check  the web  sitewww.traciedemars.com ;  for any changes regarding the classes!


Remember...with reservation...we will throw in lunch, or dinner!  :-D
~~~~~~~~~
 
Happy Saturday afternoon!  

   

   Buying a home will be the largest purchase you ever make.  The only thing that will cost your more than buying a home is having a child.  :-)  Like a child, you have to take care of your home though, and there is more to home ownership than most people realize.  
   Every month you pay bills, and your mortgage payment will most likely be your largest monthly expenditure, but what is it?  We talked last week about how a mortgage payment works, but this week, let's talk about the five parts of a mortgage payment.  

Now...what is all in your payment?
 
   There are four parts to your mortgage payment...it is called a PITI payment.  What that means is Principal, Interest, Taxes, and Insurance.  For example, my payment is $1500, but my principal/insurance portion is only $900 a month, the other $600 a month is put into an escrow account.  Out of this account comes my homeowners insurance payment once a year, my flood insurance (I live in a flood plain and am required to carry this) payment once a year, and my taxes are also paid from this account twice a year.  All of these fees are wrapped into my monthly payment for me.  Anytime you are using a FHA, or any government type of loan like RD (USDA), or the downpayment assistance programs & grants (like Home Advantage or the NHF), these fees must be wrapped into the mortgage payment.   If you don't have a 20% down payment (like 99.9% people), then your mortgage payment will actually have FIVE PARTS with the fifth part being Mortgage Insurance. 


Mortgage Insurance vs Homeowners Insurance
 Mortgage insurance is different than home owners (sometimes called, Hazard) insurance.  In a nutshell, mortgage Insurance protects the lender in case you default on your loan, and homeowners insurance protects you & the lender in case something happens to the home....ie.. a fire, a tree falling on your home, a car driving into your home, burst pipes, etc.  


Homeowners Insurance
   Now, please remember, you do choose your insurance company!  One of the things I suggest to clients is to contact their insurance company after they make their offer and to do a couple of things...(1) Has there been any water of fire claims in the past 3-5 years on this home?, and (2) How much would the insurance be for this home?  Average homeowners insurance is about $500-$700 a year....again, it is wrapped up into your monthly mortgage payment so it is not another extra expense.  You do get to choose your company, and many companies will give you discounts for 'bundling' your policies.  It doesn't hurt to call around for quotes.  Once you choose a company request that your insurance agent send over an 'insurance binder' over to your lender. 


Property Taxes
  Taxes are decided by the county, and are usually paid twice a year.  You may get a copy of the tax bill, but again, it is paid by your mortgage company out of your escrow account.  I always get phone calls when these bills come out.  :-D  No worries...it is just for your records, and I encourage your phone calls!!  :-)  Please remember that 'Tax Assessed Value' is NOT market value.


Principal & Interest
   Now...your principal and interest portion of your mortgage payment.  As we know a portion of your mortgage payment every month goes toward the principal amount that your borrowed to purchase your home, and a portion goes toward the interest that the lender is charging you.  In the beginning of your loan the smaller amount goes toward principal, and the larger portion goes toward interest...this eventually switches.  We all know the wisdom of making an additional payment every year on your mortgage to reduce your loan time.  Some banks will offer to take your payment in two week portions, and make your additional payment for you.  Honestly I don't advise this.....before you think I am crazy, this is the reason why....the bank actually holds your money and makes your additional payment at the end of the year.  This isn't the best way for you, really....  I always pay between $25-$100 extra on my mortgage every month depending upon our finances that month, but apply it directly towards my principal borrowed amount.  At the end of the year I have made that extra payment directly towards my principal, which is less money I can be charged interest on!  This will shorten my loan length considerably.  In the end I actually pay MORE on the principal amount than I would have if I had just made one extra payment.  My suggestion to all my clients is to take that $20 from each paycheck and put it into that credit union far away (with no debit card or checkbook for) that is for your home repairs that are needed as a homeowner.  If you just put at least $25 per month extra toward your principal loan amount you will also be shortening your loan time.  This sounds like a lot...but really is it?  It is a trip to McD's (for my family anyhow as we have 2 adults, 2 young adults, and a pre-schooler), or a couple of Starbucks trips a month...but it will help you in the long run immensely. 
   So there are the 5 parts of your mortgage payment...Principal, Interest, Taxes, and Insurance...both Mortgage & Homeowners.....all tidily wrapped up into one payment every month..


  Yay!  I kept it shorter this week!  :-D  It's like going to the grocery store, and only coming out with the items you went in for!!  


 *** Chris & I will be at the Clark County Fair from 8/7-8/16.  Our booth is directly to the right (second booth) as you enter in through the main doors.  Please feel free to come by and visit, or stop by for questions.  We are, as always, here to help you with your home adventure.  :-D
      

     Information is power, and I hope that I am able to help you.  Good luck, and as always...May the odds be ever in your favor out there....  If you are looking for a real estate agent, I would love to be able to help you.  
 
   As always....this is just a quick overview.... please remember that your agent, and your lender work for YOU.  You drive the bus...we are merely GPS to help you get to your goals.  Like the classes, this weekly blog email is to help you with your home adventure.  The goal is to be informative and non-promotional.  :-)  We are, however, hoping you will call and want us to help with your adventure.  


If you have any questions about this, or something you have heard...or if you would like me to help you with your home adventure, please call, email, text, or facebook me anytime.  I am, as always, happy to help!
 
Thank you again for your business and your referrals!!  ...and thank you for referring these classes to your friends, family, and co-workers. 
 
 .  ..disclaimer...if you have already purchased a home, or would no longer like to receive these emails, please let me know and I will be happy to remove you from any further mailings... 
 
 
Next Week:      Websites to find homes, and what status's mean
or...  Escrow Accounts (what they do, and what they are)
      
                     
Last Week:  Boomerang buyers, market slow down, and appraisals          

Have a great day, and I will talk to you soon,  
;-D  
Tracie DeMars  
Real Estate broker   
Re/Max - Van Mall  
360/ 903-3504 cell  
360/ 882-3600 fax  
www.traciedemars.com  
traciedemars@aol.com  
   
“Interested in free and non promotional home buyer classes?  Go to www.traciedemars.com  for local upcoming classes, or facebook: Tracie DeMars Real Estate for my home buyer education blog.  Classes are now available for home owners thinking about selling their home.  Links are on the left."

"Listen to the mustn'ts, child. Listen to the don'ts. Listen to the shouldn'ts, the impossibles, the won'ts. Listen to the never haves, then listen close to me... Anything can happen, child. Anything can be."   
   - Shel Silverstein, American poet, cartoonist and composer, (1930 - 1999).

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Boomerang Buyers...Market Slow Down, and Appraisals

7/11/2015

0 Comments

 
Picture
Upcoming Free (& non-promotional) Home Buyer Classes:   

Tuesday night, July 14 , from 5pm-8pm
       Marshall Community Center, conference room 
       1009 E. McLoughlin Blvd, Vancouver WA (kitty corner from Clark College) 

Saturday, July 18th, from 11am-2pm 
        Vancouver YMCA, conference room 
        11324 NE 51st Circle, Vancouver WA (corner of SR500 & Gher Road/112th Ave) 

Saturday August 1st , from 9am-12pm 
       Marshall Community Center, conference room 
       1009 E. McLoughlin Blvd, Vancouver WA (kitty corner from Clark College) 
 
....we also have home seller classes available too...link on left on website

 ...if these dates/times don't work for you, we have others.  Check out the website for more class dates, times, and locations.  PLEASE always check  the web  sitewww.traciedemars.com ;  for any changes regarding the classes!


Remember...with reservation...we will throw in lunch, or dinner!  :-D
~~~~~~~~~
 
Happy Saturday morning!  

   I hope you had a wonderful 4th of July Holiday weekend!  I apologize for not updating this last weekend, but I took the weekend to spend with my family.  :-)  It was lovely...my husband had 3 days off, and we stayed home to get some things done around the house.  Family time... I love it, but man, was it hot.  Ugh....heat is not my friend as I am way too pale for it, so I am enjoying the cool down this weekend.  Please let me know if you have any questions, or if there is anything I can do for you.  This weekend i want to talk a bit about some things that has come up this week....

Appraisals... I know I have talked about this before, but never start packing until the appraisal comes in.  Appraisers have the final say when it comes to a homes value, but it is very subjective on their moods, and how they want assess the value.  I had an appraisal come back this week $12,000 low.  When I am working with someone wanting to sell their home I tell them that there is a range when pricing.  The homes value falls in that range depending upon what needs to be done to the home, or the area it is located in.  There is a 'sweet' spot though....you never want to be the highest priced home because then it is more difficult for an appraiser to prove value.  If a home is the lowest in the range, and it is in good condition then it is a marketing ploy by either the seller, or the agent, to sell fast and for multiple offers.  If you, or someone you know, is thinking about selling....be leery of anyone who uses how fast they can sell a home as marketing.  Any home will sell fast if it's priced too low.  Now, there are some price ranges that do sell fairly quickly....anything under $215,000 right now is pretty crazy, as long as the home is in good condition, and in a good neighborhood. 

 The MARKET HAS SLOWED DOWN!  This is good news if you are a buyer.  March thru June are the best months to be a seller, but the worse months to be a buyer.  When June hits the market changes a bit.....with graduations, school getting out, and the weather.  With the HOT weather we have been having the market kind of hit a brick wall and slowed down quite a bit more than expected.  It isn't the feeding frenzy out there that it was.   Some sellers may be willing to negotiate a bit more than they had been.  Still don't look way above your price range, but if you see a home you really like....ask your buyers agent to contact the sellers agent about if the sellers might be willing to pay closing costs, or take a bit lower offer if maybe you don't need as much closing costs.  Sometimes this works, and as the market softens a bit for the home buyer, this is a good thing to do.  Please remember that there are some markets,and price ranges that are still smoking and where you could see multiple offers at.  The average time to sell a home is currently 78 days.  If you are thinking about buying a home, you can start breathing a bit easier now.  

Boomerang Buyers...
   What is a boomerang buyer?  This is someone who lost their home after the market crashed, and who is now eligible to buy a home again.  Yep...there is a phrase for this.  :-)  These folks, in the next couple of years, are going to be the driving force in the market.  Rent prices are CRAZY high, and only seem to be getting worse.  Property managers, and landlords, know that the rental market demand is high so they're going to milk it for all it's worth.  What most of them don't know though is that a lot of people who were forced into renting when the market initially fell, and they lost their homes.....are eligible to buy a home again, and use the programs that are out there to help people buy a home!  Yes, even some of the first time home buyer programs....boomerang buyers are now eligible for these too.  


We are now coming into a time that is much more favorable for buyers than the first half of this year has been.  This is also good for sellers because most of them want to buy a home home too. :-)    So, if you have been thinking about buying or selling a home, please take one of the non-promotional classes that are offered.  Real estate and lending is all about verbiage....and you need to know what it all really means for you with no sugar coating.  Chris Berg with Pinnacle Mortgage (503-320-0925 or cberg@pcmloan.com), and I are always available for questions.  It's what we do....     

  


     Information is power, and I hope that I am able to help you.  Good luck, and as always...May the odds be ever in your favor out there....  If you are looking for a real estate agent, I would love to be able to help you.  
 
   As always....this is just a quick overview.... please remember that your agent, and your lender work for YOU.  You drive the bus...we are merely GPS to help you get to your goals.  Like the classes, this weekly blog email is to help you with your homebuying adventure.  The goal is to be informative and non-promotional.  :-)  We are, however, hoping you will call and want us to help with your adventure.  


If you have any questions about this, or something you have heard...or if you would like me to help you with your homebuying adventure, please call, email,   text, or facebook me anytime.  I am, as always, happy to help!
 
Thank you again for your business and your referrals!!  ...and thank you for referring these classes to your friends, family, and co-workers. 
 
 .  ..disclaimer...if you have already purchased a home, or would no longer like to receive these emails, please let me know and I will be happy to remove you from any further mailings... 
 
 
Next Week:      Websites to find homes, and what status's mean
      
                     
Last Week:  Mortgage vs Rent ....how does that work?            

Have a great day, and I will talk to you soon,  
;-D  
Tracie DeMars  
Real Estate broker   
Re/Max - Van Mall  
360/ 903-3504 cell  
360/ 882-3600 fax  
www.traciedemars.com  
traciedemars@aol.com  
   
“Interested in free and non promotional home buyer classes?  Go to www.traciedemars.com  for local upcoming classes, or facebook: Tracie DeMars Real Estate for my home buyer education blog.  Classes are no available for home owners thinking about selling their home.  Links are on the left."

"Listen to the mustn'ts, child. Listen to the don'ts. Listen to the shouldn'ts, the impossibles, the won'ts. Listen to the never haves, then listen close to me... Anything can happen, child. Anything can be."   
   - Shel Silverstein, American poet, cartoonist and composer, (1930 - 1999).

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    Tracie DeMars
    real estate broker with Re/Max

    I have been in real estate for about 16 years now, and I have seen the market up, down, and now going up again.  I teach the Clark County Free Community Classes for Home Buyers & Home Sellers to help buyers learn about the loan, and home buying process; and sellers to learn about the paperwork and process of selling a home.  We are volunteers, and have no affiliations so we are able to tell it like it is...with no sugarcoating.  The pros, the cons, we tell it all in a fun, engaging, direct manner that encourages class attendee interaction and involvement.  Classes are free and non-promotional and held at community locations.  Walk -ins are welcome and all are invited.  
    ​Whether you're buying or selling a home, Education should always be your first step! 
    **we now offer Home SELLER classes too, by reservation.  It is a sellers market out there, and the classes are designed to go over all the paperwork, the 'right' questions to ask, how to make sure your agent is really working for you, what a CMA (comparable market analysis) is, and what is considered a comparable home....and going over the settlement statement.  What are the fees?  What are you going to net???

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