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What's in a mortgage payment?

Sep 24th, 2007 03:24
Jemmy wilson, grant chen, http://www.keytomortgage.com, http://www.nsrfinance.co.uk


Mortgage payments consist of costs for principal, interest, property 
tax, hazard insurance, and mortgage insurance.
Principal 
The principal is the amount of money you borrowed. Each month when you 
make your mortgage payment, you are paying back a small portion of the 
principal. The longer the payments are amortized (over 30 years for 
example), the more the payments go to reduce the principal you owe; 
over time, interest will become a smaller part of your monthly payment. 
In the beginning, most of the mortgage payments made to the lender will 
be interest payments.
Interest 
Interest is the cost of borrowing money, usually expressed as an annual 
percentage of the loan amount - for example 8.125%, 9.000%, etc. 
Lenders will offer different rates depending on the type of loan 
program offered. 
Property Taxes 
These are taxes paid to local governments, usually charged as a 
percentage of the property value. Your lender collects the taxes 
through your monthly payments. The amount of tax will vary depending on 
the location of the home. 
Hazard Insurance 
This is a contract that protects you from any financial losses on your 
property that might result from fire, flood, or any other "hazards." 
Mortgage Insurance 
This is an insurance policy that pays mortgage lenders for part of 
their financial losses if a borrower fails to fully repay a loan. 
Mortgage insurance makes it possible to buy a home with a low down 
payment.
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The Independent Mortgage Specialist
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We offer some niche products in self build mortgages. 
We have access to the whole of market including all of the major High
Street lenders, Building societies and have access to exclusive schemes
not available anywhere else. 
In addition to finding the best re-mortgage and purchase deals
available, we have the experience and expertise to help individuals that
have encountered difficulties in finding a mortgage in the past, so
whether you have had a less than perfect credit history, or simply are
unable to prove your income you can be sure to find the best deal
available at NSR Finance. 
Self Build Mortgages
The main difference between a self build mortgage and a house purchase
mortgage is that with a self build mortgage money is released in stages
as the build progresses rather than as a single amount. Some lenders
will lend you money to purchase land, typically 75% of the purchase
price or value, whichever is lowest. After this, the money for the build
is released in a series of stages. These can be fixed or flexible
depending on the lender but usually there are five. During the build you
can borrow typically 75% of the cost of the value of the house as the
project progresses, depending on the chosen lender. 
Read More at http://www.nsrfinance.co.uk 
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