Boulder Mortgage Payment: what’s included

Open the door to home ownership with your Boulder mortgage payment: what's included explains how to budget
Open the door to home ownership with your Boulder mortgage payment: what’s included explains how to budget

3 out of 4 homes approve

Buying a home with a mortgage is one of the most common ways to purchase a home in America. Three in four homes are purchased with financing, locally new  Boulder mortgage payment home sales account for about 2 in 3 transactions.

Home ownership is rewarding. Studies show owners have higher incomes and greater happiness than renters. When you are ready to become a home owner, your first order of business should be determining the monthly Boulder mortgage payment you will be comfortable with over time.

First, determine how much money you will put down on your home.

The down payment can be zero to twenty percent of the purchase price on the most common loans. Zero? Yes, it still exists in the VA home loan. USDA loans for rural areas are also a great way to have a very low down payment. 

The Chfa program is anther option, where you only need $1000 down.  Just keep in mind, your monthly Boulder mortgage payment will be higher with less money down.   Which brings us to the next step,  it is time to figure out your  monthly Boulder mortgage payment.

What makes up a monthly home mortgage payment?

There are four key components to a modern monthly Boulder mortgage payment: Principal, Interest, Taxes, Insurance and for covenant controlled communities, your Home Owner Association dues.

Wait, I just wrote, 1, 2, 3, 4, 5 items. Why is that? Well, because PITI – Principal, Interest, Taxes and Insurance is the traditional four items of a mortgage payment.

But many homes these days also include HOA payments, and you are going to be concerned with the actual bottom line – thus the 5th monthly expenditure.

Take a Moment to Define each component of a Boulder mortgage payment

  1. Principle – this is the monthly payment towards the original loan debt. This portion of the payment reduces how much you photo of a bridge crossing over to a neighborhood and the words bridge loanactually owe. In practice, the first year’s principal payment portion is very small. To speed up your loan or reduce the amount of interest you pay annually, consider making additional principal payments every month.
  2. Interest – the rate will be determined prior to closing, but interest is the fee the bank or lender charges per month for loaning you the money in the first place.
  3. Taxes – real estate property is taxed in Colorado. Property taxes fund schools, roads, the fire department and all sorts of other government programming. Taxes vary from town to town, so as you contemplate your monthly home mortgage payment budget, consider this. Taxes are higher in Boulder and lower in Erie. Buying in Erie might allow you to focus more of your budgeted monthly payment on the home rather than the tax bill.
  4. Insurance – these days there two distinct types of insurance required: Mortgage Insurance and Hazard Insurance.  Hazard insurance is required on your new home. It covers many catastrophes – fire, hail, wind damage. What would you do if your house burned down? The mortgage payment would still be due. Insurance is incredibly important to protect your home’s best interests.  Mortgage Insurance is mandated by the government. It protects against default on the underlying loan. It protects the Lender in case you are unable to pay back the loan.
  5. HOA dues – many homes and condos are in Associations. There are fees to maintain the community and provide reserve funds for future improvements. HOA dues are generally not a large fee, but you should budget for such expenses in newer neighborhoods.

By first taking the time to work on a home budget you are protecting your own best interests. Knowing what you can afford for principal, interest, taxes, insurance and HOA dues puts you one step closer to owning your dream home. It never hurts to be prepared!  Here is another site with additional information here.  Or view Additional Resources (updated 5/19/14): comprehensive Mortgage Lender List

 

Leave a Comment