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Table of ContentsAbout What Percentage Of Mortgages Are FhaFacts About What Are The Different Types Of Mortgages UncoveredOur What Is The Interest Rate Today For Mortgages PDFs

There are extremely stringent laws that were passed in current years that need lending institutions do their due diligence to offer you all the options possible to bring your mortgage current or exit homeownership with dignity. how mortgages work. By understanding how your home loan works, you can secure your investment in your house, and will know what actions to take if you ever have difficulties making the payments.

What I want to finish with this video is discuss what a home mortgage is however I believe the majority of us have a least a basic sense of it. However even better than that actually enter into the numbers and comprehend a little bit of what you are really doing when you're paying a home mortgage, what it's made up of and just how much of it is interest versus just how much of it is in fact paying down the loan.

Let's say that there is a home that I like, let's state that that is your house that I would like to acquire. It has a price of, let's say that I need to pay $500,000 to purchase that home, this is the seller of your house right here.

I want to purchase it. I wish to buy your house. This is me right here. And I have actually had the ability to conserve up $125,000. I've had the ability to conserve up $125,000 however I would truly like to live in that house so I go to a bank, I go to a bank, get a brand-new color for the bank, so that is the bank right there.

Bank, can you lend me the rest of the amount I require for that house, which is basically $375,000. I'm putting 25 percent down, this right, this right, this number right here, that is 25 percent of $500,000. which type of interest is calculated on home mortgages. So, I ask the bank, can I have a loan for the balance? Can I have a $375,000 loan? And the bank states, sure, you appear like, uh, uh, a nice person with a good job who has a good credit rating.

We need to have that title of your home and when you settle the loan we're going to provide you the title of your house. So what's going to happen here is we're going to have the loan is going to go to me, so it's $375,000, $375,000 loan.

But the title of your home, the document that says who really owns the home, so this is the home title, this is the title of the house, home, house title. It will not go to me. It will go to the bank, the house title will go from the seller, perhaps even the seller's bank, possibly they have not paid off their home loan, it will go to the bank that I'm borrowing from.

So, this is the security right here. That is technically what a home mortgage is. This vowing of the title for, as the, as the security for the loan, that's what a home mortgage is. And actually it originates from old French, mort, means dead, dead, and the gage, suggests promise, I'm, I'm a hundred percent sure I'm mispronouncing it, however it comes from dead promise.

As soon as I pay off the loan this promise of the title to the bank will pass away, it'll return to me (what are reverse mortgages). And that's why it's called a dead pledge or a home loan. And most likely since it comes from old French is the reason we do not say mort gage. We state, home mortgage.

They're actually describing the home mortgage, home mortgage, the home loan. And what I wish to carry out in the rest of this video is use a little screenshot from a spreadsheet I made to actually reveal you the math or actually reveal you what your mortgage payment is going to. And you can download, you can download this spreadsheet at Khan Academy, khanacademy.org/downloads, downloads, slash mortgage calculator, home loan, or actually, even much better, simply go to the download, just go to the downloads, downloads, uh, folder on your web browser, you'll see a lot of files and it'll be the file called mortgage calculator, home loan calculator, calculator dot XLSX.

But simply go to this URL and after that you'll see all of the files there and after that you can just download this file if you want to have fun with it. However what it does here remains in this kind of dark brown color, these are the assumptions that you might input and that you can change these cells in your spreadsheet without breaking the entire spreadsheet.

I'm buying a $500,000 house. It's a 25 percent down payment, so that's the $125,000 that I had saved up, that I 'd discussed right there. And then the, uh, loan amount, well, https://www.timeshareexitcompanies.com/wesley-financial-group-reviews/ I have the $125,000, I'm going to need to obtain $375,000. It calculates it for us and after that I'm going to get a pretty plain vanilla loan.

So, thirty years, it's going to be a 30-year set rate home mortgage, repaired rate, fixed rate, which means the interest rate will not alter. We'll talk about that in a little bit. This 5.5 percent that I am paying on my, on the cash that I obtained will not alter throughout the thirty years.

Now, this little tax rate that I have here, this is to actually determine, what is the tax cost savings of the interest reduction on my loan? And we'll talk about that in a second, we can overlook it in the meantime. And then these other things that aren't in brown, you should not tinker these if you actually do open this spreadsheet yourself.

So, it's actually the yearly rate of interest, 5.5 percent, divided by 12 and a lot of home loan https://www.globalbankingandfinance.com/category/news/record-numbers-of-consumers-continue-to-ask-wesley-financial-group-to-assist-in-timeshare-debt-relief/ are intensified on a regular monthly basis - why do banks sell mortgages. So, at the end of each month they see just how much money you owe and then they will charge you this much interest on that for the month.

It's actually a pretty interesting problem. However for a $500,000 loan, well, a $500,000 home, a $375,000 loan over thirty years at a 5.5 percent rates of interest. My home mortgage payment is going to be roughly $2,100. Now, right when I purchased your home I want to introduce a bit of vocabulary and we have actually spoken about this in a few of the other videos.

And we're presuming that it's worth $500,000. We are presuming that it's worth $500,000. That is an asset. It's a possession because it provides you future benefit, the future advantage of being able to reside in it. Now, there's a liability versus that asset, that's the home loan, that's the $375,000 liability, $375,000 loan or debt.

If this was all of your possessions and this is all of your financial obligation and if you were essentially to sell the properties and settle the debt. If you offer your house you 'd get the title, you can get the cash and then you pay it back to the bank.