A mortgage is basically a long-term loan that you arrange through a financial institution or  through the seller of the property. The house and/or property serve as collateral for the loan.

A home mortgage is most likely the largest debt you will assume. You typically pay off that debt in monthly payments over a long period of time, most often 15 to 30 years.

What's In a Payment?

A monthly mortgage payment typically includes the following, known as PITI:

PMI gives the lender protection if the homeowner should default on the loan. The mortgage company charges insurance if the down payment is less than 20 percent of the sale price or appraised value.  PMI usually can be eliminated once the principal balance of the mortgage reaches 80 percent of the sale price or appraised value, which is known as the loan-to-value (LTV) ratio.

The process of paying the principal takes years because mortgages are based on a repayment plan called amortization.  During the years of the mortgage, a homeowner pays a lot of money toward interest in order to have manageable monthly payments on the huge house debt. During the first few years, most of the mortgage payments will be applied toward the interest. During the final years of the loan, the payments will be applied primarily to the remaining principal.

Example

Let's look at a $100,000 mortgage, at a fixed interest rate of 7.5 percent, for 30 years. In three decades, the homeowner would pay $151,717 in interest.

Of course, you cannot put a price on the pleasure of living in your own home and building equity, an unencumbered interest in your property. Equity grows as you pay off the principal of the mortgage and as the property appreciates in value. Also, there are tax incentives, since mortgage interest is a deduction on your federal income tax.

For an estimate of buying, refinancing or home equity potential, please fill out our simple loan application.

Hunter Financial Group, LLC offers a wide range of purchase money loan products. We are able to tailor a custom program to fit each client's specific needs. We can help you get into a home with the best terms available. Please call us or use one of our online forms if you would like to see how you can get a new home with little or no money down and excellent repayment terms.  Click here to fill out a simple loan application.

Hunter Financial Group, LLC has a list of preferred partners that includes, “Realtors, Appraisers, Title Companies and more”.   We are also members of the Tempe and Scottsdale Chamber of Commerce in addition to the Arizona Better Business Bureau.