Newbie’s need to realize that mortgages have two built in charges that create their monthly payment rate. The actual amount of money from each payment that is being applied to the amount of money being borrowed is often times referred to as the principle because this is the principle amount of the loan. Interest is figured into each payment because the bank has to earn money as they are lending it.
Not all of each monthly house payment I going to be applied directly to principle as interest has to be accommodated for. Some of the payment will go toward principle and some is allocated to interest for that particular month. There are many methods for a bank to determine how much of the payment goes to each section however the amortization schedule is among the most common.
An amortization schedule breaks down each monthly payment for the life of the loan and allows the bank and homeowner to see how much o each payment goes toward principle and how much goes toward interest. During the beginning, more money will go toward interest. As the homeowner decreases the amount of principle, less loan money is accumulating interest and therefore interest is less.
Once a new homebuyer begins to understand the basics behind mortgage rates and how the amortization of payment works, they will typically be able to understand the banker providing the loan much better. Some first time buyers are very young and have other things of their mind as they start their new life. Because the borrower’s mind is preoccupied, some of the bank teller talk will seem like a foreign language. If you’re looking to get the lowest mortgage rates around the Tampa Bay area, give me a call or apply online at www.baytobaylending.com.
Contact Laurie Toland via phone at (813) 642-7361 or reach out via email at firstname.lastname@example.org. Access Bay to Bay Lending’s mortgage loan calculator here: http://www.baytobaylending.com/
Whether you are seeking to purchase a new home or refinancing (http://www.baytobaylending.com/