Numbers You Need to Know Before You Sign a Mortgage

Numbers You Need to Know Before You Sign a MortgageMake sure you’ve got these numbers in hand before you close on the house.

Your offer has been accepted and you’ve been approved for a mortgage! Knowing the purchase price of a home and the size of a down payment, there are a lot of numbers to consider before you arrive at the closing of that home sale. Review these 10 costs to calculate the weight of your financial agreement.

The Loan Terms
These amounts, which include the loan amount, interest rate, and monthly principle and interest payment are locked in and cannot increase after closing. However, your monthly payment could still vary because of homeowners’ association fees or escrow amounts for taxes and/or insurance.

Estimated Total Payment
Along with the principle and interest listed already, you should note your estimated escrow payment for property taxes and insurance, along with any other assessments such as homeowners’ association fees that can hike up your monthly costs.

Closing Costs
To include survey and title fees, appraisal fees, title services, and tax services.

Cash to Close
Calculate the amount of cash you’ll need to bring to closing by subtracting the earnest money you’ve already paid from the total of all closing costs.

APR
The last number you’ll find on the loan estimate is the annual percentage rate!

Rate-Lock Period
New regulations will make it impossible to close a loan in 30 days.

Total Cost of Borrowing
How much it actually costs you to borrow the money over the length of the term.

Amortization Length
Ask for a detailed schedule that breaks down how much of each payment is going to principle and interest.

Prepayment Option Amount
Generally around 15 to 20 percent is how much of a lump sum you can put down on principle every year without getting charged a penalty.

Insurance Charges
If you’re putting down less than 20 percent of the purchase of the home, you may be charged a mortgage insurance premium until the principle is 80 percent or less of the cost of the home.

Talk to a pro about your numbers to consider with selling your home! Contact Avis Lending for the expert advice that will get all of your financial ducks in a row! We serve all of Irvine, California and Lahaina, Hawaii with West Coast mortgage needs!

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