What's in a Colorado Mortgage Payment

What's in a Mortgage Payment?

A monthly Colorado mortgage has two parts - the part paid towards the principal and the part paid towards interest. There is often a third part of the Colorado mortgage which is the amount paid into an escrow account that the lender maintains for you pay things like hazard insurance, property taxes, association fees and mortgage insurance. These elements together are called the PITI (Principal, Interest, Taxes, Insurance).

Your tax information and insurance costs information
Colorado homeowners pay property taxes and homeowners insurance and most homeowners pay what is called an "escrow account" which is when the lenders keep enough money to cover your property taxes and homeowners insurance. A sum is paid each month into this account as part of your mortgage payment, so when the taxes and insurance are due, the lender pays them fore you. The Olorado lending company sends you period statements with the account action. You can compare the statement given by the lending company with your property tax bill and your homeowners policy to make sure that the right amount is being withheld. The Real Estate Settlement Procedures Act (RESPA), which is enforced by the U.S. Department of Housing and Urban Development (HUD), is the main law covering escrow accounts.

Force placed insurance is when the lender can buy Colorado insurance on your behalf and is usually more expensive, so it is important to maintain the required Colorado property insurance on your Colorado home.

When you buy a home you can obtain the amount of annual property taxes on the house from the seller. A local insurance agent can tell you how much annual insurance costs in the area. Divide these numbers by 12 and add them to the principal plus interest and you can see how much is estimated for monthly payment.

What is private mortgage insurance?
If a Colorado mortgage buyer puts down less than 20 percent as the down payment, a Colorado mortgage lender may require the buyer to buy another type of insurance called a private mortgage insurance (PMI). This gives the Colorado mortgage lender some insurance in case the borrower can not repay the Colorado home loan and can not recover costs after selling and foreclosing. The annual cost of PMI differs depending on the loan, but is between .19 percent and 1.0 percent of the total loan. The loan amount, loan-to-value ratio, occupancy, documentation provided at loan origination and the credit score determine the cost of the rate of PMI. Once the Colorado home owner has paid 80 percent of the loan the PMI can be canceled although you may have to prove equity by an appraisal.

Making bi-weekly payments
Most Colorado mortgage payments give you the option of paying every two weeks instead of once a month but is most common for a 30-year fixed-rate mortgage. This pays your mortgage quicker and offers more rapid building equity. Because you are paying every 14 days, your loan term shortens to 22 or 23 years which also significantly decreases the amount paid in interest.

Fill Out An Application

Take the first step and fill out the online application. Once contacted, we will let you know within a day if you are approved for your loan amount and will close within 10 days.

30 Year Home Saver

Our 30-Year Home Saver Loan provides security and saves you money. In fact, few mortgage companies are AUTHORIZED by the Federal Housing Authority to sell these products.