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OWNERSHIP 101

You're a homeowner but you still have questions about your monthly payment, taxes, insurance, and when to consider refinancing. We have answers for your here.

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My Monthly Payment Breakdown

​Your monthly mortgage payment is made up of a number of components commonly referred to as "PITI" (Principal, Interest, Taxes, and Insurance)

  • PRINCIPAL: The beginning loan amount as stated on the loan note and the subsequent balance after each loan payment is made.

  • INTEREST: The charge for the use (loan) of the money.

  • TAXES: The county assessor determines the property tax based on the value of your home. Taxes may be included in your payment depending on the loan program you are in.

  • HOMEOWNERS (HAZARD) INSURANCE: An insurance that covers the loss of the home from specific hazards, such as fire. An in insurance agent provides this type of insurance. See an insurance agent with any questions you have about homeowners insurance. This type of insurance may also be included in your payment.

  • PMI, FHA MIP, VA FUNDING FEE, USDA GUARANTEE FEE: Charges for these items would be included in your payment. See our section on What Is PMI to learn the basics about PMI. 

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I Want To Switch Insurance Companies

Switch Ins

Your home, your choice!

Who you choose to insure your home is entirely up to you. The insurance just has to have proper coverage and deductible requirements. But say you want to switch insurance companies after you close your loan. No problem!!

First, you will want to have your old policy and mortgage information on hand so the new company can incorporate the coverages, limits, and mortgage account information into your new policy.

Second, you will want to notify your current company that you will not be renewing your policy, or cancelling, and let them know when the new policy is to take place go into effect.

Third, if your insurance is being escrowed in your mortgage payment, you will want to notify your servicer (whomever you are making your payment to) of the change. The servicer will want to know who your new policy is with, along with contact information.

 

My Property Taxes

Whether your property taxes are being paid in escrow or not, you will still receive a copy of the tax bill in the mail. If you do pay your taxes in escrow (with your mortgage payment), don't panic at receiving the tax bill. That doesn't mean you have come up with the funds to pay them, they are simply notifying you what your tax amounts are. 

If your taxes are being paid in escrow, it is a good idea to check once a year to make sure they are being paid. While it's extremely rare that a mortgage servicer does not pay property taxes, it is ultimately the responsibility of the home owner to make sure they are paid.

Prop Taxes
Refi

Should I Refinance?

There are various things to consider when looking at refinancing. Here are some reasons why you might want to consider it.

1. YOU WANT TO REMOVE MORTGAGE INSURANCE (PMI): If you are in an FHA loan where the PMI stays on for the life of the loan and you have reached the 20% equity mark, it would be wise to look at refinancing into a conventional mortgage to free yourself from having to pay PMI. 

2. CONVERT AN ADJUSTABLE RATE MORTGAGE TO A FIXED RATE MORTGAGE: Pretty self-explanatory. If your adjustable rate is starting to rise, it may be beneficial to look at getting into a fixed payment.

3. COMBINE A FIRST AND SECOND MORTGAGE: Maybe you took out a 2nd mortgage and want are tired of making two house payments. If the equity is there, you could combine those two mortgages into one and save money.

4. LOWER YOUR INTEREST RATE: We will break down where you are at with your current mortgage and compare it to what we could put you in. Sometimes the lower rate isn't that beneficial depending on where you are at in your current mortgage. We will give you all the insight you need to make the best decision.

5. USE YOUR HOME AS A CASH TOOL: Maybe your kids need braces. Maybe you want to take your family on that week long cruise. Maybe you have something you want to buy. No matter what the reason is, the equity in your home may be the best way to handle those expenses.

CONTACT US TODAY to discuss refinancing. Together we can see if it's a good option for you and your financial goals.

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