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Weston Dean Homes Blog

Understanding Your Mortgage

May 24, 2019

calculate your mortgage payments

Weston Dean Homes, a premier New Braunfels custom builder, knows that your home mortgage is one of the most important payments you'll make in your life. We also know that some of the lingo can be a little confusing, so we've shed some light on terms and general aspects of mortgages, below. Whether your are searching for a new home this spring or just moved into your beautiful new Weston Dean Home, it is good to have a full grasp on what makes up your mortgage.

First, let's review some of the most commonly used terms associated with mortgages. A mortgage, a home mortgage, or a lien refers to an "agreement between a bank and a lender to pay to lend money in exchange for a piece of property," according this article about mortgages. An appraisal will give you an idea of the estimated worth of the property, and that amount will help dictate your mortgage. Collateral is the property promised to a debt; that is, if you fall behind on your mortgage payments and have promised collateral, the bank may take back the possessions promised in order to recoup the money they haven't been paid. Foreclosure is the legal process for the bank taking back the home and the property on which it sits; however, don't get too worried about this bit. As long as you are able to make the minimum payments on your house, you should not worry about being foreclosed. Principal is the amount left to pay back on the loan. This debt amount does not include interest, so principal isn't a 100% accurate way of estimating your mortgage bills; interest, closing costs, and escrow will alter that number. Homeowners insurance will cover damages due to theft, most natural disasters, and personal liability and varies depending on the insurance plan you select. This cost is another important factor in deciding to purchase a home; in addition to mortgage repayments, homeowners insurance is another significant bill to consider. Your statement will have a lot of important information listed throughout it. At the top, a customer service phone number, address, and email will be listed; this contact info will help you get in touch with your loan provider, should you have any questions or choose to refinance. The top of the statement will usually also include your loan number and due date of your coming payment. A section titled "summary" will usually include your current monthly payment, overdue total, unpaid late charges, and the total payment due as of the current statement. Generally, this total will include escrow, principal, taxes, and interest, and is the amount you will pay to your loan provider. Your interest rate, expressed as a percentage, is the amount charged for use of the borrowed money used to pay for your mortgage. Your payment activity will usually be listed towards the lower portion of the page and reviews payments you've submitted and itemizes the escrow, interest, and other charges corresponding to each payment. If you encounter any confusion when studying your mortgage bills, give your lender a call and they will be able to help sort things out.   Weston Dean Homes is a San Antonio area custom home builder. For additional information about Weston Dean building your San Antonio new home, please call (210) 408-9107.
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