This mortgage that I’ve been hearing all about – what exactly does the mortgage cover? When deciding to buy your New Orleans home, you should know what you’re getting into. As your top New Orleans real estate agents, we want you to be as informed as possible.
Your mortgage payment will cover the following items:
#1. Principal & Interest
This is how much your purchase amount was broken down into 360 payments (30-year loan) and including interest, you are paying on the loan. Make one extra payment a year to knock SEVEN years off the life of your loan.
#2. Homeowner’s Insurance
Yep! Even your homeowner’s insurance is included in this payment. Be mindful that this insurance tends to increase, so keep shopping it around every year if need be.
#3. Flood insurance. Sometimes.
If you are required by your lender to have flood insurance on your New Orleans home, then this payment will also be included. These rates are set by FEMA. If you have your house raised, or add flood vents in your raised basement or garage, or have an elevation certificate, this can help lower the amount. Talk to your insurance provider.
#4. Property Taxes.
You’re going to very thankful when your tax bill comes in and you remember that your mortgage costs are covering that! If you recently got a loan when the tax bills were sent out, call your mortgage lender to make sure they paid it.
#5. Mortgage Insurance.
Any loan that you put down less than 20%, you will have to pay mortgage insurance. In some cases, this insurance will be on the loan forever. In other cases, it will come off once you have built up enough equity in your home. Talk to your local lender about this.
Some of these items are also pre-paid for in your closing costs, but you still have to renew them each year.
Talk to your local New Orleans real estate agent about finding out your options. Send a text!