Navigating the home buying process is tricky enough – but when acronyms are thrown into the mix, it can send you for a loop. We would like to review one of the most commonly used acronyms in the home buying process…
P – Principal – this is the amount that you are borrowing. Depending on what program you are using & what costs you decide to roll into the loan, this can contain several different factors including closing costs, private mortgage insurance, etc. Bottom line, this is the dollar amount that your monthly payments will be based on.
I – Interest – Interest rates are still at record lows – this is great for both buyers & sellers! The amount of interest you pay is based on your credit, the loan type, the lender you choose & other factors. Talk to your lender about how rates can affect your monthly payment and some best practices to follow when locking in the rate!
T – Taxes – The amount of taxes you will pay is based on a formula and includes using the purchase price and the local millage rate. If you are intending to live in your home as a primary residence, be sure that you get instructions on how to file for your homestead exemption and include any potential portable `prior tax savings.
I – Insurance – For most people, insuring the biggest investment you make in your lifetime is a no brainer. Be sure to factor in insurance costs as part of your escrow when buying a home. Talk to one of our REALTOR’S® about their experiences and shop around for the best deal!
For more details on how to calculate your PITI contact Carole Hendricks at Prime Lending here.
To see how Reel Keeper Realty can help you navigate the many nuances of your next home purchase or sale -contact us anytime at 904.414.4000 or firstname.lastname@example.org.