Understand Chicago Real Estate Market

 

Chicago real estate is not a terror. The functioning in Chicago real estate is same as other states and cities with a slight difference.

Chicago real estate market:

 

It is similar with others. There a bunch of real estate agents, lawyers and realtors. At present there are 18,397 houses for sale. The average price is $319,000. There are around four new homes. Their average cost is $889,000.forforclosure there around 15000 houses. Their average rate is$ 200,000.

 

As far as mortgage rates are concerned they are:

 

Mortgage type interest

 

15 years fixed

 

30 year fixed

 

1 year ARM

 

3/1year ARM 6.195%

 

6.585%

 

5.533%

 

5.599%

 

A good credit score is above 700.

 

Selling procedure:

 

The selling procedure requires the fixing of the actual cost of the property. You should make sure that the house is appealing and in good condition. You should make sure whether some repairing is required or not. If any repairing is required you should make sure that it is completed.

 

Buying process:

 

One should make sure that his credit limit is at least over 700. It might be possible that you might require a loan. And you should be ready to have it.

 

Real estate agent is common to both. In all cases his/her presence means comfort. They are professionals.

 

Housing prices are going on reducing. According to the survey organized by OHFEO the price are reducing. However the rate is a bit les in Chicago land.

 

It’s believed that we have reached the bottom but it’s not really the case. Most of the gain was in the apartment building and not singe family house.

 

In 2007 the market in Chicago has not fallen but it was a bit slow. According to the survey conducted the first three month of 2007 saw the reduction in the condo rate from 46% to 47%. Some of the luxurious hotels are about to be completed in 2008 and investors have shown their interest in it.

 

There is an awesome deal for you there is one program which will win you a thirty year fixed mortgage. 4% of the amount will be required to use for down payment and condominium. You should check out for this program as soon as possible. This can be huge for any buyer.

 

Chicago is big market and it’s a boom for both sellers and buyers. You can hire very experienced real estate agents. In fagot the exam which the real estate agent has to pass is very tough. You will really get high quality real estate agents. According to the survey conducted only 5 % of the deals in Chicago have been affected by forgery. It’s really a safe place to invest.

 

Real Estate-Investment Tips

 

Real estate investment is a tricky job. Investors who are supposed to be successful have the follow things in common:

  1. Power to calculate the exact value of the real estate.

 

  1. Experience the pitfalls of the real estate market.

 

  1. Have patience.

 

Real estate is a great business. Some tips related to real estate investment are;

 

  1. Identify the exact rent and cost of the property: the most appropriate way of identifying the exact rent and cost of the property is to look after the cost and rent of the neighboring houses.

 

  1. Get specialized in any one of the branches. There are lots to branches in real estate. Some of them are: small apartments, condominium, foreclosures, starter homes and so on.

 

  1. You should know about the financial statement related to the property. You should know what the loan amount is, down payment etc. these are compulsory to be kept in mind before solid investment.

 

  1. You should know the details of the tenant. You should know what are their proper histories? You should keep them on rent only after this.

 

  1. You should frequently check with your accountants about the taxes. You should be in touch of experienced accountants for better tax details.

 

Investment in real estate is similar to that in stocks. How ever the risk factor is low as far as real estate is concerned.

 

Let us consider the marketing of real estate. There are many mistakes which an investor commits:

 

  1. Most of the investors lack in marketing strategy.

 

  1. Some ways will always be better than others. Go for the best one and don’t stick on one.

 

  1. Most are found to cross the budget which they fix in the beginning

 

and many more.

 

One should always look for the ways which will be fruitful as far as taxes are concerned. Some more tips are:

 

  1. Look for the cheap real estates.

 

  1. Go for foreclosure. It really profitable.

 

  1. Be extra cautious while hiring real estate agents.

 

  1. If you have guts then go for the disputed properties.

 

  1. You can opt for wholesaling. This way you will be able to earn lots of profit.

 

  1. Always bargain before investing in any property.

 

  1. Go for the best.

 

  1. Have patience.

 

  1. Hire good real agents

 

  1. Give proper time for finding the appropriate real estate to invest in.

 

Real estate requires extra caution. If you are cautious enough you can be great while investing in real estate.

Real Estate Business: A Learning Experience

Flipping houses is becoming a big trend in the real estate industry. It is a great opportunity to make money from the profits you will gain for every house sold. It is proven that this kind of business could work but not everybody can make it big especially for beginners.

You can see lots of advertising campaigns dedicated to promote house flipping business. There are even shows on the television produced to make people understand how this real estate business works. They say it is so easy that even people with no experience in real estate investment can succeed in flipping houses and make lots of money for a short span of time.

Though you can really gain profits from a real estate business, it is not as easy as it seems. Every business comes with risks. It takes a lot of effort, hard work and dedication to achieve success. You have to carefully plan your actions and look at every angle before making a decision.

House flipping business requires a small start up cost. You can pay only the down payment to get an old house. It is up to you now how to fix and repair this house and turn it into a beautiful one. One mistake beginners make is hiring a bunch of workers to do the repairs and fixing. As we all know, contractors have other jobs booked so you have to wait until prior commitments are done.

You will now make the contract and set a fix amount to pay for the whole project. Hiring contractors will cost you about thousands of dollars. In most cases, contractors require a deposit to be made before they start a project. When the contractor encountered some troubles and cannot continue with the project you will have no other choice but to hire another set.

This could take a long time and as months go by, the project will cost you more because of the house payment you have to make every month. This is in addition to project cost like contractor’s fee and construction materials. In short you will not lose your money but you will not make a fortune either. That is not bad for a first timer.

To prevent this from happening, buy a house that needs simple repairs. You can hire just a few men to do these repairs and you can even help in some areas to speed up the job. If you feel you must really hire a contractor, be sure to specify a deadline in the contract to make sure the job will be completed on or before that deadline. Instead of listing with a realtor, market your own house and make sure you know the right market value of your property.

Learn from the mistakes you have done from previous experience and make sure you will not repeat the same mistakes again. Do some research on real estate business to acquire useful tips and strategies. Read about people who are into real estate business and learn from their personal experiences. One such experience can be had from popular Hobart Handler 140 review site Tool Guides Hub.

Real Estate Agent Cash Crisis and What You Can Do About It

Many real estate agents are suffering financially. Possibly this is you. It is unfortunate but houses are selling much below their value and are staying on the market for months. There are more sellers than buyers and there is no relief to be seen in the very near future.

People are struggling; struggling to pay bills to pay debts. The real estate industry is a tough market to be in right now. Possibly you have been wanting to find a way to get you through.

 

One of the best solutions is to start a home business. There are many tax advantages and you have the benefit of writing off many of your household expenses at tax time. It is also flexible. Something you can do while still being a real estate agent. Maybe something to tide you over until the economic situation improves or maybe something that permanently creates an income for you. The key is to find the right business. One that is recession proof.

 

When searching for any home business there are some critical evaluating tools you need.

 

Want to work from home? Have you considered these crucial evaluating tools?

 

So you have decided that you would like to work from home. Maybe you want to stay home with your children, maybe you want money for that extra special something or maybe you want to create financial freedom. Maybe you just need to pay your bills and pay off debt. So you know your reasons why. This is a great start but now what?

 

It is easy to want to jump into the first thing that comes along. Something may sound good on the surface, so you should jump right in, right? Wrong.

 

There are several key factors that anyone and everyone should consider when deciding on what business would be right for them. Ensuring you have thoroughly researched the opportunity can save you a lot of money, a lot of time, and more importantly, a lot of heartache. I have heard too many stories of people going broke trying to find the right one. I even know someone who has tried 23 opportunities before finding the right one. Can you imagine?

 

The first key in researching a business is knowing what features you should be looking for in a company. You will definitely need to know the following:

 

  • Is there an established track record?

 

You want the company to be at least seven years old – successful home-based business companies experience a surge of growth in their first 3-5 years, but most cannot support the increased capital and organizational needs this growth demands to continue their success. Be wary the person who says “this is a ground floor opportunity” or you need to “catch the wave”.

 

  • Is the company financially sound?

 

You should be able to get access to this information. Another great way to know if a company is legit, is trustworthy and has integrity is if they will let you see their previous years’ income statistics. If they’re not willing to share what their business people make, do you really think they’re doing that well. And I don’t just mean the top earners, find out what the “little guy” is making.

 

  • Do they have a strong management team and company credentials?

 

Beware! There are some companies out there who are “touting” scientists behind their products that have received their degree by mail order over the internet. Do your research! What is the history of the management? What awards have they received? What does the Better Business Bureau have to say about them?

 

  • Does this company have unique, consumable products that are guaranteed?

 

There are companies that have only one product. How many of that one product do you think you have to sell to make any money? If this is a luxury item, you most likely won’t get repeat sales from the same person which creates much more work for you. If it’s a hobby, you are looking at the same thing. The product should be something that a person goes through and needs again fairly soon, preferably monthly. These products should also have a 100% guarantee.

 

  • Does this company require that you keep inventory or ‘front end load’?

 

This is a very fast way to the poor house. I know lots of folks who have garages full of products. You may think it will be easy to ‘unload’ it but it’s not. Make sure the company does not require you to have stock or inventory.

 

  • Is there a low personal production requirement?

 

Essentially, this means how much of their product do you need to order to stay in business? If they are asking you to order more than you would use, then you guessed it? Straight to the poor house for you.

 

  • Is there a high customer re-order rate?

 

Some companies have a re-order rate of only 5%. Does this tell you how hard you will have to work to win customers and keep them? Again, if the company won’t give you this information then they have something to hide!

 

  • Is there low initial investment?

 

You should be able to get started in any business for $500 or less. In addition, any investment should be guaranteed. Any more than that and the risk sky rockets.

 

  • Is there low attrition?

 

If more than 10% of the people are leaving every month, what does that tell you?

 

  • Is there breakaways?

 

No breakaways!!! What that means is that you work really hard and then when you reach a desired level, they have the rest of your team “break away” from you and you start all over. Does that sound like what you are looking for? Know the compensation plan. You should be able to earn an income from each person you offer your product or service to. No breakaways, no balancing sides.

 

  • Does the company have any risk?

 

Risk is a 4 letter word. It has its place but not in your business. This is your life. There should be no risk. You should only be using products you would use anyway, and there should be a full guarantee on everything. If this is the case, there is no risk!

 

Alright, so now that you know what is important to look for in the company, what product concept makes the most sense, you ask?

 

Repeat Consumables (necessity items) and I can’t stress this enough. This is a 200 billion dollar industry. People must already want or need to buy the products. It is much easier to interest people in something that is better or less expensive than their current brand than it is to get them to buy something new that they hadn’t considered before. The concept of “switching stores” works best because people spend “no new money”, they just switch brands. Durable goods won’t generate residual income because people won’t buy each month.

 

The products should always be competitively priced (have a low cost per use). No matter how well people like something, they won’t stay customers forever if the product costs more than the store bought equivalent. Since commissions depend on customer purchases, the longer they stay, the more RELIABLE your income. The products must also be unique and exclusive to the company. It is of benefit if there are patented products that have been scientifically developed. The re-order rate should be above 90% and it has to make sense to just be a customer, continuing to buy the products without being a business builder.

 

Lastly there are a few more things that you may want to consider. Does the company manufacture its own products? Does the business offer a system that you can duplicate for success? Does the organization provide you with free training and support? Do you have to leave your home to build the business? Do you need experience in sales or business to be successful? Can you make enough to replace your income? What are the tax advantages to owning a home-based business?

 

I know this seems like a lot of work, but the end result will make for a happier, wealthier you. Good luck in your search!

Io: Jupiter’s Hottest Real Estate

Unique among the known moons in the solar system, Io is a bizarre world whose properties have only been investigated for the past thirty years. NASA discovered that Io was anything but the cold, dead satellite they expected when the Voyager space probes flew past Jupiter in 1979. The probes showed a scarred and angry moon, bursting with volcanic life as plumes of lava shot far above its surface. Ever since then, Io has been a source of endless fascination for astronomers.

At roughly 3,640 km in diameter, Io is one of the four Galilean satellites orbiting Jupiter (the four moons Galileo Galilei could observe through his telescope: Io, Europa, Ganymede, and Callisto). It is also the closest to the gas giant, approximately 420,000 km away from Jupiter, and mostly made of silicate rock, iron, and some sulfur. The “short” distance from its planet, as well as the gravity of the other Galilean moons, are what keep its volcanic engines running. Gravity pulls on Io like the moon’s gravity pulls on Earth to cause the ocean’s tide, and heat results from the friction that this gravity causes in Io’s interior. The heat leads to a tremendous number of volcanoes, as well as frequent eruptions.

With as many as four hundred active volcanoes on its surface, Io is the most geologically active body in the solar system. The plumes of these volcanoes can shoot hundreds of kilometers into the Ionian sky, thanks to lower gravity and different makeup than most magma on Earth (Io’s magma is mostly composed of basalt, magnesium, and sulfur); the erupted molten rock on Io is believed to be much thinner than ours, about the same consistency as olive oil. Io is believed to have turned itself completely inside out several times, over the billions of years since its formation. On a side note, this constant resurfacing explains why there are hardly any impact craters on its surface, unlike most of Jupiter’s other moons.

Io also has a very thin atmosphere, mostly made of gases and particles ejected during its eruption. Thanks to these particles and a strong magnetic field that Jupiter produces, there is a strong electric current running between Io and Jupiter, which causes giant lightning storms in the gas giant’s atmosphere.

These are just a few of the incredible facts we have recently learned about Io, Jupiter’s hyperactive moon. Not only is it one of the most important discoveries we have made in exploring our cosmological neighborhood, but Io serves as a compelling reminder that the universe is full of surprises, and that we never truly know what we could discover next.

5 Steps to Your Property in Spain: How to Buy Real Estate on the Costa Blanca

  1. Meet With a Real Estate Agent�

When buying overseas property, it is always advisable to take at least a few trips to the location. Photographs do not give enough information when spending large amounts of money, so it is best to deal directly with a real estate agent in the country itself. When looking for property in Spain, one should narrow their choices down to a particular area and then find a local agent to assist them in finding the ideal purchase. Many real estate agents in Spain can speak English, so there is no need to be bilingual. It is best to inform the agent what kind of property one is looking for and what kind of price one is able to spend. Although the agent makes a commission off of the sale and will want the highest price possible, they can shorten the list of properties to include only the ones the buyer can afford. Then, the Spanish agent will be able to personally take the buyer to the locations.

  1. Find a Desirable Location�

There are many things to consider when being shown various properties. If this is purely an investment venture and isn’t going to be the buyer’s place of residency, the decision will be more practical and emotionless. The investment in Spanish property is currently a profitable and stable one. So, if a good deal is found and it is plausible to find willing tenants for the location, then the choice should be easy. However, buyers that may want to stay in this particular location, either permanently or for vacations, will want to consider more. For example, is the location attractive and conveniently located? Are there nearby facilities, such as a hospital, restaurants, or shopping districts? New residents may also want to inquire about local schools, just as they would when buying a residency in their home country.

  1. Prepare Money for the Purchase�

There are two common ways of readying money for a real estate venture in Spain. One way, often reserved for the wealthiest buyers, is to merely pay for the property in cash. This may be an easy approach for some, but it can also interfere with the equity built by the purchase. Often, the best way to buy real estate in Spain is by obtaining a mortgage loan from a local Spanish bank. Luckily, the real estate industry is booming right now in Spain, so banks are fiercely competing with each other. A buyer should use this to their advantage by comparing interest rates and bringing competitors? offers to rival banks. Often, banks will attempt to match or beat their competitors? offers. Proper identification and proof of financial history must be shown to a bank when financing a purchase. One should be sure to bring their relevant documentation when traveling to Spain for the mortgage loan.

  1. Pay for Closing Costs

Whether one pays for property with cash or finances it through a mortgage loan, closing costs are due up front and must be ready when signing the dotted line. A deposit is made to the seller and is often 5% to 10% of the purchase price. It is wise to allow a trusted third party, the real estate agent, to hold onto the deposit until the sales agreement is signed. Optionally, a deposit agreement can be drafted in order to protect the buyer’s investment. Although it isn’t absolutely necessary, some buyers feel that this is the stage in which a lawyer should assist them. Other closing costs can include payment to the real estate agency, although that may be escrowed into the mortgage.

5.Sign the Sales Agreement�

The sales agreement, or opción de compra, is signed on closing day. Closing day will be a day that both the seller and buyer agree on. It is the buyer’s duty to make sure all of the mortgage lender’s affairs have been taken care of on the seller’s end. Then, it is only a matter of signing the final paperwork in front of a notary public. Those who are inexperienced with real estate and/or the Spanish culture may again opt to have a lawyer present. When choosing a lawyer to look over the final paperwork, the buyer should be sure to hire one that isn’t associated with the seller. That way, the buyer can be sure that the lawyer is completely unbiased. After the closing costs are paid and the sales agreement is finalized, the real estate transaction is finished.

Zhenya Zoning Real Estate Issues Earnings Warning

For SLReports.net

Zhenya Zoning Real Estate (ZEN : SLCAPEX) CEO Ashleigh Wade issued a press release yesterday stating, in part, that ZEN(SLCAPEX) was providing a warning that the firm may not make profits in December.

“We want to issue a precautionary warning regarding our financial trending for this month,” Wade said in the press release, “It looks like we will be right at break even or a bit shy of it. Not a huge shocker considering that we are a SL Estate Company and three months into a transition that included a floor to ceiling re-organization and development. You should know, however, our sales force is out there going gangbusters to fill our seven open parcels and things could turn out well. “

ZEN(SLCAPEX) also has a sale going on which Wade promoted, stating, “We have parcels available and we are selling them for nothing but two weeks tier up front (pay the land and we will set your box and notify you). We want you to have a little ZEN in your life. If you are in the market for a community of great people who are diverse, active, love to explore and share then you should check us out. From ZEN Fifth Avenue in Tamaqua to ZEN Live! in Tuscarora to the peace of Blue Mountain and picturesque scenery of Panther Valley we have a little bit of everything.”

ZEN(SLCAPEX) has been trading between L$1.20 and L$1.40 for the last ten days on an average volume of just over 3100 shares. ZEN(SLCAPEX) has a 2-Star Luminos Dividend Rating, with a 6DYA of L$0.0037.

Tips for Investing in Commercial Real Estate

Investing in commercial real estate can be a great way to add to both value to an investors assets and can also be a source of income. Commercial real estate that is well positioned can increase dramatically in price. Rented or leased commercial real estate can provide a steady cash flow for retirement, investing, or other financial pursuits. Here are some tips for investing in commercial real estate that individual investors can use.

Investing in Commercial Real Estate Tips – Use Personal Knowledge

Regardless of the sector, the best investment ideas come from an investor’s personal knowledge and experience. An investor should look for property in their home area or other areas where they are familiar with the market and use their knowledge to determine where and what to buy.

Investing in Commercial Real Estate Tips – Be Patient

Perhaps the worst mistake a commercial real estate investor can make is buying too quickly. Just because an investor has the money and has looked at what is available does not mean they are ready to buy. Investors need to be patient and buy only when they are comfortable with the real estate and the price.

Investing in Commercial Real Estate Tips – Develop a Real Estate Network

Every investor in commercial real estate, or other real estate, needs a real estate network. Having a friend or trusted business associate in the contracting, banking, legal, and real estate sales professions can help an investor find deals as well as make good decisions managing the investments.

Investing in Commercial Real Estate Tips – Have Short Term and Long Term Goals

A commercial real estate investor needs to be able to look at both the immediate impact of their investment as well as the long term prospects. Cities are filled with run down commercial property that was once profitable. Shifts in transportation routes and large employers can often be predicted with some success and these changes might greatly impact a property’s value in coming years.

Investing in Commercial Real Estate Tips – Diversity

Just as with any investment, an investor putting all of their money into commercial real estate is taking a big risk. While keeping the properties rented can provide a good cash flow a market downturn at retirement time can be disastrous. Commercial real estate should only be only one part of an investor’s holdings to provide protection from such an event. Even within the commercial real estate investing sector there are ways to diversify. Investors can spread their money around into different types of commercial real estate such as raw land, office buildings, retail space, apartment buildings, and hotels.

Make Money with Real Estate

It is every man’s dream; to one day own their own home. When a person purchases property, it is most likely for the purpose living in it. Research studies reveal that the average family stays in their first home for approximately five years before they purchase a new and larger home as their family increases in number. What most of these people do not apprehend is the fact that they can actually use their first home as a means to make money.

Truth is; property is one of the most valuable assets you can purchase in your lifetime. T is one way for you to make money while you sleep. Meaning instead of you working for money your property is making money work for you.

There are a number of ways that you can put your property to work for you:

  1. a) Renting the property out for a steady monthly income or you refurbishing it to make a huge profit on it. With the money you make in excess of the selling price and what you put into the property, you can use it to purchase another piece of property. Then repeat the same process repeatedly doubling your profit. This is perhaps the easiest way to make money with property.
  2. b) Another way is taking advantage of the government tax breaks offered on property. Many people do not realize that in most cases the money you make from selling your home is tax-free so you do not have to worry about paying taxes on this income. It is a free and clear way to make money from real estate and literally anyone can do it.

c) A third way that is more complex than the above two is private mortgage. Property can be used as a leveraging tool to grow your capital. Let’s say you have bad credit, you can use a private mortgages to purchase a piece of property and pay it off at a better rate than that offered at banks and save money and by the time you’re done you can sell it off at the market price and make a profit. Meanwhile the value of our house continues to appreciate

These are just three ways to make money on your property. There are numerous other ways, too many to mention here. But the misconceptions that people have with how to make money with property is very real; as most feel that this is only something the rich can do but in fact this is something that anyone can do if they play their cards right are stopping people from learning the right way to go about making money with property.

With the current global economy many feel that it is a risky get into the property business yet now is the perfect time to make money with property. And yes, before you do make your property investment decision it does help to check with local agencies and read widely on the property market to see the best way to go about making money with property. Alternative money making methods to raise starting capital for real estate projects is website development, such as travel site Iceland in 8 Days.

Real Estate Finance 101: How to Calculate Your Mortgage Payment

When making a real estate purchase, one of the largest factors that will determine whether or not you purchase a property is the amount of the monthly mortgage payment. Oddly enough, many buyers do not know exactly how to calculate the amount of the mortgage.

While your real estate agent and/or lender should be able to provide an estimate of the monthly mortgage payment, it is a good idea for you to know how those figures are calculated. This article breaks down the components of the mortgage payment, the typical amount of each component, and how the information can be obtained and determined.

The Components of the Mortgage Payment

Most websites that offer a mortgage payment calculator only calculate the principal and interest portions of the payment. In fact, the entire mortgage payment is typically comprised of principal, interest, taxes, and insurance, commonly referred to as PITI.

To calculate the amount of your mortgage, you will need to know:

The principal amount of the loan;

The interest rate of the loan;

The term of the loan (the number of months for your mortgage);

The annual amount of property taxes;

The annual premium for hazard insurance;

The annual premium for mortgage insurance (if applicable).

Let’s say that you have a 30-year, $200,000 mortgage at an interest rate of 6%. Annual property taxes are $3,000 and the annual hazard insurance premium is $500. The annual mortgage insurance premium is $1,000. In word form, the monthly mortgage payment is calculated by multiplying the present value of the loan principal amount by the monthly interest rate (6% divided by 12 months) for a term of 360 months (30 years). This results in the principal and interest portion of the payment. To easily calculate the payment, I usually use Microsoft’s Excel program and use the “PMT” (payment) formula.

 

Once you have the principal and interest portions of your payment, add the following to the payment: monthly amount due for property taxes, monthly amount due for hazard insurance, and monthly amount due for mortgage insurance. All monthly amounts can be calculated by dividing the annual amounts by 12. This makes up your complete mortgage payment.

 

The principal amount is the actual portion of the loan that is being repaid, while interest is the fee you pay to the lender for the use of their money. The interest on a mortgage is usually expressed as an annual percentage of the principal. It is important to note that the amount of interest is usually the largest part of the mortgage payment. The amount of interest paid is usually reduced as the loan amortizes. More of your payment then goes towards the principal amount of the loan.

 

The taxes that are included in your mortgage payment are the property taxes that are due annually, as assessed by your county of residence, while hazard insurance is the protection on your home in case of random “hazards” (i.e. break-ins, fire, earthquakes, etc). Depending on where your home is located, you may also be required to obtain flood insurance for your property (this is usually separate from the standard hazard insurance policy). Additional insurance that could be required as part of your monthly mortgage payment is private mortgage insurance (PMI) or a mortgage insurance premium (MIP). This insurance is usually required if the loan-to-value ratio for your home loan is more than 80%.

 

Please note that some people will tell you that taxes and hazard insurance are optional portions of the mortgage payment. This is true with some lenders. In this case, you would just pay principal and interest (and mortgage insurance, if required) to them, but you are responsible for paying your own taxes and hazard insurance when they are due. However, most lenders will require you to pay a portion of taxes and insurance monthly as part of your mortgage payment. This is because the lender wants to ensure these items are paid on time in order to mitigate the risk to their asset (your home that you have pledged as collateral for the funds that you’ve borrowed).

 

When taxes and insurance are included as part of your monthly mortgage payment, the lender places these payments in an escrow account and disburses the funds as the bills are due. This is advantageous to the borrower since you won’t have to worry about coming up with the funds at the end of the year to pay your property taxes and hazard insurance-especially if you are not as disciplined to set aside the funds yourself throughout the year.

 

How to Obtain the Information to Determine Your Monthly Mortgage

 

The principal and interest amounts for your loan are pretty easy to find. This information is included in your loan documents if you have already secured a loan and know the interest rate of the loan.

 

The amount of your property taxes can be estimated by looking at the last tax bill. This is always an estimate, as the tax value of your property can be adjusted annually, depending on the state and county in which you live. The rate at which your property is taxed can also change; therefore, the last tax bill is a good indicator of what to expect going forward.

 

Hazard insurance is determined by your insurance company, and depends on various factors including the age of the home, whether or not you have a security system, and the proximity of your home to a fire hydrant, just to name a few. Like car insurance, it pays to shop around for hazard insurance. Usually, the company that you have your car insured with will offer a discount for your home insurance.

 

Mortgage insurance is determined by the insurer and usually varies, depending upon whether you have a conventional loan (which is insured by a private company), or a loan backed by the Federal Housing Association (FHA) or Veterans Association (VA), for FHA and VA loans, respectively. This factor of the mortgage payment is the least readily determinable in advance, but the annual premium should not amount to more than 0.75% of the principal amount of your mortgage.