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# Real Estate Home Mortgages/Mortgage

Question
QUESTION: Hi, Brian,
I'd greatly appreciate it if you could answer the following questions regarding mortgage when buying a house.

a) Is this how the monthly mortgage payment should be calculated?

Example for a \$250,000 house
Down payment: 20% = \$50,000
Remaining balance to be paid: \$200,000
Interest rate for 30-year fixed: 3.5%
3.5% x \$200,000 = \$7000 a year
\$7000 / 12 months = \$583.33/month of mortgage

b) Is \$583.33/month all I would need to pay for my house, apart from the low lending fees?

c) If they say that 3.5% is the fixed interest rate for 30-year mortgage for New York, does this mean that it's the average interest rate in NY, or would it be the fixed rate in every town/region in NY? In other words, if Albany had 3.5%, would it be the same in NYC?

d) Can anyone in the family pay for the mortgage, or do they require the owner of the house to do so?

The \$583.33 per month is how much per month you would pay in interest.
If you only paid \$583.33 per month, your principal balance of \$200,000 would never go down.
Thus, the principal and interest payment would be \$898.09 per month.
You would also have property taxes and homeowners insurance included in your mortgage payment.  The annual premium for both would be divided by 12 months and this would be added to your \$898.09 payment.

Yes, anyone can pay the mortgage, but only you will be the one responsible.  So, if someone does not make a payment, then it will have a negative affect on only your credit.

I hope I've helped you out.
Brian Hahn

---------- FOLLOW-UP ----------

QUESTION: Hi, Brian,
Thank you for your reply. Yes, I realized that I forgot to count in the principal after I sent off my question. LOL

How did you come up with \$898.09/month? I'd greatly appreciate it if you could show me how to calculate the monthly mortgage payment based on these terms:
\$250,000 house
Down payment of 20%
30-year term with fixed interest rate of 3.5%
Town tax: \$3000
School tax: \$4000

Do I have the option not to include the taxes and premium in my monthly mortgage payment?

The interest rate is applied only to the principal, not the taxes and premium, right?

Julie,
I input your loan information in my computer that calculates monthly payments.
Yes, you have the option to not include the taxes and homeowners insurance in your monthly mortgage payment as long as your down payment is a minimum of 20%.  There is a 1-time fee of 0.25% of your loan amount to waive impounds/escrows.

Yes, the interest rate is applied only the the balance of your mortgage/loan.  It has nothing to do with the taxes and insurance premium.

Brian
This topic answers questions related to purchasing a home, owning a home, home ownership, mortgage education, mortgage applications, and mortgage needs whether buying a first home or refinancing a current loan. Issues related to home ownership, home equity, mortgage education, refinacing options, home improvment finacing, first time home loans, home equity loans, vactation home loans, and mortgages for investment homes are dealt with here also. Though not the primary focus of this topic, Home Equity Lines of Credits (HELOCS), reverse mortgages, and calculating home equity may also be asked. If you do not see your home mortgae, home finacing, or home equity question answered in this area then please ask a question here

Real Estate Home Mortgages

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#### Brian HAHN

##### Expertise

I am a mortgage banker/loan officer.Have top knowledge of all types of mortgage loans.Can assist nearly anyone looking to finance a residential property.I enjoy traveling [Society Islands (Tahiti, Bora Bora), Hawaii (Maui) and Africa (Zimbabwe)].I keep detailed information on adventures and am willing to share this information with others.{{Bachelor of Science in Business Administration from the University of Iowa, 1986"