Posted on: 12th Nov, 2009 04:02 am
I wll be closing on 12/23/09. the home costs $125,000 I have a 5.25% interest rate? what would be my monthly payments for everything?
Also I am putting 3.5% down (FHA) in addition the lender wants me to pay $1,300 in escrow for a total of $5,700 Is that right? Why is escrow so much more. I thought all I needed was a down payment.
Also I am putting 3.5% down (FHA) in addition the lender wants me to pay $1,300 in escrow for a total of $5,700 Is that right? Why is escrow so much more. I thought all I needed was a down payment.
Hi,
To find out how much your monthly payment would be, you need a few more details. What is the term of the loan? How much tax do you need to pay for the property? FHA also requires you to pay 1.75% of the purchase price as mortgage insurance premium, with an annual MIP of 0.50-0.55%.
The escrow is meant for payment of taxes and insurance. This is to make sure that you stay current in payment of property taxes and insurance premiums. If your property taxes and insurance premiums are high, you will have to pay a considerable amount of money towards the escrow account. Moreover, the lender is probably keeping some additional money in reserve so that even if you fail to make the mortgage payments in future, the taxes and insurance could be paid from the escrow account.
To find out how much your monthly payment would be, you need a few more details. What is the term of the loan? How much tax do you need to pay for the property? FHA also requires you to pay 1.75% of the purchase price as mortgage insurance premium, with an annual MIP of 0.50-0.55%.
The escrow is meant for payment of taxes and insurance. This is to make sure that you stay current in payment of property taxes and insurance premiums. If your property taxes and insurance premiums are high, you will have to pay a considerable amount of money towards the escrow account. Moreover, the lender is probably keeping some additional money in reserve so that even if you fail to make the mortgage payments in future, the taxes and insurance could be paid from the escrow account.