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For most homeowners, the monthly mortgage payments include three separate parts:
Principal: Repayment on the amount borrowed.
Interest: Payment to the lender for the amount borrowed.
Insurance: Monthly payments made into a special escrow account for items like hazard insurance and property taxes. Escrowing for taxes and insurance is sometimes optional, in which case they get paid straight to the County Tax Assessor and property insurance company.
The decision to rent or buy a home is different for everyone. Purchasing a home could be a better financial deal for you depending on how long your plan to live in your home and the type of loan you can afford. Try our Rent vs Own Calculator to help you decide which option is best for you.
Being part of and investing in your community and achieving the dream of homeownership are a few of the many benefits. As you continue to make mortgage payments, you build home equity instead of spending money on rent you will never get back. There are some significant financial benefits as well, including tax savings. Interest payments on a mortgage can be tax-deductible, but be sure to consult your tax advisor for more information.
There is no simple formula to determine the type of mortgage that is best for you. This choice depends on your current financial picture and how long you intend to keep your house. A Lyons Mortgage professional can help you weigh your options and make the most appropriate decision.
With a fixed-rate mortgage, the interest rate stays the same during the life of the loan. With an adjustable-rate mortgage (ARM), the interest changes in relation to an index. While the monthly payments that you make with a fixed-rate mortgage are consistent, payments on an ARM loan will likely change. There are advantages and disadvantages to each type of mortgage: read more about it here.
You can register to make mortgage payments online at our mortgage servicing website:
Generally speaking, you can buy a home with a value of two or three times your annual household income. The amount that you can borrow also depends on employment history, credit history, current savings, debts, and the size of the down payment. You may also be able to take advantage of special loan programs for first-time buyers to buy a home with a higher value. We help everyone determine exactly how much they can afford.
Your mortgage payment typically consists of the following components, often referred to as PITI:
Choosing the right mortgage depends on your financial situation, goals, and risk tolerance. Fixed-rate mortgages offer consistent payments over time, making budgeting easier. Adjustable-rate mortgages (ARMs) might start with lower rates but can adjust over time. To determine the best fit, consider your long-term plans, how long you intend to stay in the home, and your comfort level with potential rate changes.
A fixed-rate loan maintains the same interest rate and monthly payment throughout the life of the loan. This offers stability but might have a higher initial rate. An adjustable-rate loan starts with a fixed rate for a set period, then adjusts periodically based on an index. Initial rates are often lower, but future adjustments can lead to rate increases.
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