STREAMING NOW: Watch Now

My Money Monday, April 30 - Mortgage loan basics

"There are a lot of areas to pay attention to during the mortgage process, but most people are concerned with what their final monthly payment will be."

Posted: Apr 30, 2018 8:22 AM
Updated: Jun 20, 2018 2:03 PM

Link: https://www.firstalliancecu.com/blog/ten-questions-to-ask-a-lender-mortgage

Q: What are the main things someone should be paying attention to when getting a mortgage?

A: There are a lot of areas to pay attention to during the mortgage process, but most people are concerned with what their final monthly payment will be. So the two biggest factors that contribute to that are the size of your down payment and the interest rate you lock in at.

Q: Tell me more about down payments.

A: Essentially, the more money you can use as a down payment the lower your monthly payment will be because you have to borrow that much less for your home loan. You generally want to have at minimum 3-5% of the total cost of the home you’re planning to purchase for a down payment. However, having 20% or more to put down will allow you to avoid Private Mortgage Insurance costs, which can add a significant amount to your monthly payment.

Q: What is Private Mortgage Insurance?

A: With most loans, if you make a down payment of less than 20% of the home's cost, your lender will require private mortgage insurance (PMI). It's a protection for the lender in case you default on your loan. Each lender has different cost structures for this so it’s important to ask your lender what these fees will be. However, they are most often added to your monthly payment.

Article Comments

Mason City
Clear
60° wxIcon
Hi: 76° Lo: 54°
Feels Like: 60°
Albert Lea
Clear
66° wxIcon
Hi: 74° Lo: 54°
Feels Like: 66°
Austin
Clear
66° wxIcon
Hi: 76° Lo: 56°
Feels Like: 66°
Charles City
Clear
61° wxIcon
Hi: 75° Lo: 54°
Feels Like: 61°
Rochester
Clear
60° wxIcon
Hi: 73° Lo: 55°
Feels Like: 60°
Tracking sunny skies all this week
KIMT Radar
KIMT Eye in the sky

Latest Video

Image

Chris' PM Forecast 7/22

Image

Innovative City

Image

Historic Wet Weather

Image

Lawn Mower Safety

Image

Tree and Brush Removal

Image

Storm Damage Cleanup

Image

My Money: How to refinance your home

Image

My Money: When to start a college savings account

Image

Tracking Plenty of Sunshine for Monday

Image

Severe weather clean up in Olmsted County

Community Events