# Real Estate Home Mortgages/Mortgage questions

Question
Hi, Mark,
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?

Happy to help answer the questions for you.  I apologize for the delayed response.  i have been out of town and had not remembered to put out the vacation responders.

A:  You correctly identified how to calculate the interest payment on the mortgage. Your calculations do not include principle payback however, so the payment would be a bit higher than what you are showing above.  Once you add in the principle payback the 30 year payment would be 898.09.  There are several mortgage calculators available on the web that you can use to play around with loan sizes and interest rates. this site has several types of calculators available for free. http://trillionmortgage.com/mortgage-payment-calculator/

A1- The balance you show does not account for closing costs- if those are paid on top of the down payment then your balance is correct, otherwise you would need to add the closing costs to the remaining balance to be paid.

B.  The 583.33 would only be the interest portion of the payment.  You would still have the principle as described above, and would also need to account for property taxes and homeowners insurance.  Those are usually included with your monthly payments- and then the payments to your insurance company and for the taxes are paid by the mortgage servicing company.  You also did not account for mortgage insurance.  Depending on the type of mortgage you take you may have a monthly mortgage insurance payment on top of this.  A loan officer would be able to assist you in estimating this.

C.  3.5% fixed rate may have a slight variance from place to place, but is usually pretty consistent throughout the state, and throughout the country.  You may find some differences in rate from different mortgage companies.  Its always a good idea to shop around to find the best rate (make sure you look at closing costs as well as some lenders increase or decrease the rate by charging more or less on closing costs).  When shopping you can also ensure you get a loan officer you are comfortable with.

D.  Anyone can pay the mortgage, however you must qualify for the mortgage as the borrower, if others are moving in with you they can be on the loan as well.  The mortgage company will not care where the payment comes from as long as they are paid.  If a payment is missed they will hold you accountable regardless of who was making the payment for you.

Hope that helps.
Questioner's Rating
 Rating(1-10) Knowledgeability = 10 Clarity of Response = 10 Politeness = 10 Comment Thank you, Mark, for your assistance! I appreciate it.

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

Volunteer

#### Mark Schow

##### Expertise

Can: reverse mortgage, mortgages of all types, debt management and settlement, foreclosure problems, real estate investment strategies. Can't: real estate law, standard banking outside mortgage and debt.

##### Experience

2002-2004 President of the Utah Association of Mortgage Brokers (UAMB) 2004-2008 Board member UAMB, Fraud task force chair, PR chair, Legislative chair. 2002-2005 Delegate to National Association of Mortgage Brokers, Legislative committee. 1996-2008 COO Debt Free Living- Now Debt Fast Track. Founder of company- consumer debt elimination company. 1994-2008 President Secured Financial Freedom. Mortgage broker, serviced nationwide, 120 employees and handled real estate investment loans for the Carlton Sheets group and some Rich Dad clients. 2005-2011 ARES, LLC. Owner, Manager. Private money investments, business consulting. 2011- present, Reverse My Mortgage, LLC. Managing Member. Reverse mortgage education, marketing and sales. 2011- present. Salt TV Network. Financial contributor, Sales Manager.

Organizations
UAMB, NAMB

Publications

Education/Credentials
High School- Alta High graduated 1984 Brigham young University- 1986-1991 Business Finance Major

Past/Present Clients
Salttvnetwork.com, Doreen Stein, PEI institute, Franklin Covey Coaching, Capital Financial Group, the rest are consumers- cannot give out names due to privacy but have had thousands of clients both for debt elimination and mortgage work.