mortgage loan

exalted512

I'm looking into getting a house. I got an estimate for a loan of $65,450 for it. The monthly payment for this is $683.39/month for 360/months. Multiply those two together and I'm paying $246k for a 65k loan?

Is that normal?

No wonder the housing market is so screwed up.
-Cody

amulford

Yep. Find a mortgage calculator and punch in your numbers. Take notice of the ratio of principal to interest through the course of the mortgage. They get the cream up front, don't get it f#cked up.

Now you can cut that down considerably. Find out you principle payment at the end of the mortgage, and if you can swing it, put that on it every month.

Or take out a fifteen year note...

madmax

sounds a little high. That must include taxes and insurance.
madmax

obieone

I'm paying $750/ month on a $112k mortgage. It's a VA @6.2%, w/ no $ down. Don't know if I'm getting screwed or not. Just putting it out there for comparison.
And yes, my payments include taxes & ins.

fatchowmein

http://www.bankrate.com/brm/mortgage-calculator.asp

mule

When I got my first mortgage statement and I saw that only $105 got applied to the principle each month, I said to myself "this is unacceptable" For the first year or two I was sending an extra $600 a month toward the principle. Now the statement says about $250 a month goes toward principle so I cut my extra payment down a little.

If you do this it takes years and years off the mortgage and will help with your long term sanity:)

disneyjoe7

All loans are like that.

exalted512

It does have the fees and such in it, thats what the big difference is. The actual mortgage is only $500.
-Cody

danger boy

exalted512 wrote: »

I'm looking into getting a house. I got an estimate for a loan of $65,450 for it. The monthly payment for this is $683.39/month for 360/months. Multiply those two together and I'm paying $246k for a 65k loan?

Is that normal?

No wonder the housing market is so screwed up.
-Cody

Welcome to the world of home ownership.. what rate is that at? 6.5% or lower or higher?

daboyz

Make extra payments,make sure they are "to principle" and that will cut down your final **** by a ton.

vlam

When I got my first mortgage statement and I saw that only $105 got applied to the principle each month, I said to myself "this is unacceptable" For the first year or two I was sending an extra $600 a month toward the principle. Now the statement says about $250 a month goes toward principle so I cut my extra payment down a little.

If you do this it takes years and years off the mortgage and will help with your long term sanity

That's the whole idea behind those mortgage accelerator program. If you make an extra month of payment torward principle every year, you cut a 30yr mortgage by a few years.

On the subject of monthly payment. If your monthly payment includes escrow for taxes and insurance, that monthly payment will usually go up every year.

Sami

exalted512 wrote: »

No wonder the housing market is so screwed up.

Your numbers must be wrong, with 30y and 6.25% rate it comes to 402.99 a month. Do you have insurance and real estate taxes calculated in also? On that amount, first year, you'll get $4k tax deduction, plus inflation is going to eat away another $2k from the principle. On the other hand, rents are only going up, and you have to figure in that cost on the opposite side of the table.

Rents go up 3-4% every year, inflation eats your principle away by the same amount...how can you lose? Overall numbers, it's a very good investment unless your house price plummets.

My advice...put down enough money to get the best rate, no more. Pay the minimum each month, anything extra you put on investment account. If stock market is not your place to be, max out your 401k and/or IRA accounts rather than make extra house payments.

mule

vlam wrote: »

That's the whole idea behind those mortgage accelerator program. If you make an extra month of payment torward principle every year, you cut a 30yr mortgage by a few years.

On the subject of monthly payment. If your monthly payment includes escrow for taxes and insurance, that monthly payment will usually go up every year.

I am shooting for 10 to 12 years, I want to get back to working 3 days a week and the only way I can do that is if I don't have any bills.

phuz

For just principle and interest that is high. If it includes taxes, insurance, or other yearly costs that's different.

Oh, and does that include PMI?

tcrossma

Sami wrote: »

My advice...put down enough money to get the best rate, no more. Pay the minimum each month, anything extra you put on investment account. If stock market is not your place to be, max out your 401k and/or IRA accounts rather than make extra house payments.

+1. Good advice here as far as I'm concerned. It's what I do.

Squidmon

Yeah, don't forget the PMI. There's still a few programs out there for seller-funded PMI. Cranks up the selling price a little bit plus the loan amount, but could possibly save you a few bux a month on your payments.
And if not, always remember to keep checking the value of your home. Once you reach >20% equity, get with your mortgage company and get them to drop the PMI. Most people dont know that this can be done (until they change the rules again).