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Jay Said:

I want to buy a house, is it possible?

We Answered:

You really need to begin your homework by talking with several lenders in your area. Each will have different loan programs and they need to take into account your whole financial picture. If you skip a step to get a quick answer, you will get taken advantage of and be unhappy with the buying process. Let's be smart here from the get go, do your mortgage homework, then find a Realtor you're comfortable working with and listen to them to keep yourself out of financial trouble. Two more things, if you buy a foreclosure pay to have a whole house inspection and at closing by title insurance.

Barbara Said:

how to get the lowest rate on out mortgage payments?

We Answered:

you need to buy points to get the premium down,

Alex Said:

Could you pay insurance and taxes early on a home to avoid them being applied to the mortgage?

We Answered:

IT depends on what the percentage of your home's value you have financed. I believe that under 80% you can handle your own taxes and insurance out side of the mortgage company. There may also be something in the contract you have with them, that does not permit you to do so. I had financed about 60% of my home value, so I did not have an escrow account. My home owner's insurance was about half of what the mortgage company would have charged me. And I paid my property taxes in two installments a year, so I didn't have one huge bill once a year. Read the paper work from the company.

Stephanie Said:

Help! Who knows how to calculate loan payments? It's for a college math class?

We Answered:

You can't really answer these in order:

1) Yes, unless they spend wildly and foolishly on other things. I would suggest a $4000 downpayment.

2) General rule of thumb is 1/3 of income can be used for PITI (principal, interest, taxes, and insurance) which in this case $1,388.88. (50,000/3/12) But this is a general guideline, not a mathematical certainty.

5) House payment PI (principal and interest only) for a 144,000 home at 7.2% over 20 years is $1,133.78 per month. That is assuming no downpayment. If they put 4,000 down, then it is $1,102.29. The downpayment you choose will make a difference in this answer.

3) With a downpayment of $4000, a sale price of $144,000, an interest rate of 7.2% on a 20 year loan, plus the $2400 for taxes and $300 for insurance (PITI), the PITI is $1327.29. Multiply that by 240 months and you get $318,549.60.

4) Yes, I am going to use $4000 in my answer, but they can afford more if they want to reduce their monthly payments. I would suggest they use anywhere between $4000 and $20000 for a downpayment. Take this from their savings - but leave a little for emergencies, moving costs, utility deposits, and new furniture and curtains.

7) At the end of the mortgage, the homeowner will have paid $124,529.36 in interest alone.

6) Because the taxes and insurance are not actually "paying for the house" and they were already included in the answer to #3, I will leave them out of this part of the answer. The total for the house itself is going to be $144,000 (including the downpayment). The total of the principal and the interest comes to: $268,529.36.

8) Monthly expenses - PITI (principal, interest, taxes and insurance) = $1,327.29. This is in line with the estimate in answer #2 which is based on their income.

You should become familiar with amortization tables if you need to do this kind of homework. If you have Microsoft Excel, you can create your own spreadsheet and just pop the numbers in. I belive there is one already built that comes with Excel. Search for help on the IPMT Worksheet Calculation.

You can also use one of the mortgage calculators on my website: http://www.HouseHuntingHound.com
or
http://www.pattiannkasper.com/mortgage_c…